Prepaid cards hold loan amounts in new alternative credit efforts
Feb 11, 2013 Sean Albert
Cash transactions can only take consumers so far today, and the use of alternative credit sources for funding purchases is increasingly becoming favored by many. Thankfully for many, prepaid cards are allowing a range of financial activities for all.
The Philippines has become a source of innovation in the prepaid card revolution, according to the country's website. Its Home Development Mutual Fund (HDMF) is ready to disperse prepaid cards to 12 million loan holders in an effort to make management of such funds easier and ultimately more secure for users. The fund specifies loans for the use of healthcare payments, schooling, necessary home renovations and some small business efforts will be applicable for placement on cards.
"This is the kind of beneficial consequence that results when government and the private sector work towards a common goal," an HDMF representative stated.
This partnership between the Philippines, Citi and Visa will require a 10.5 percent interest rate on most loans, but those who reside in areas that have been hit by major disasters such as hurricanes and tsunamis may be eligible for an interest rate just under six percent covering 80 percent or less of their total loan.