The PabilinKO Loan

A first-of-its-kind loan product to help rural Filipinos rebuild after Typhoon Haiyain. PablinKO was developed to allow even those without access to common paperwork required by banks to borrow money to rebuild the livelihoods they lost with the typhoon. It also prepares families for future catastrophes by building on a current saving practice: the funeral fund.

TEAM: IDEO.org in partnership with Mercy Corps, BPI Globe BanKO and CauseLabs

A Country in Recovery

Typhoon Haiyan, also known as Typhoon Yolanda, hit The Philippines in November of 2013 disrupting the lives of over 13 million people

Rebuilding What Was Lost

Fishermen lost their boats, farmers lost their crops but everyone works together to support one another through difficult times to rebuild and recover.

Research Tent

Our team set up a tent for our research game "Utang Bulaga" or "Loan Surprise". A game to learn about people's perceptions, fears and experiences with loans.

Loan Surprise Game

A young woman reacts after throwing the dice that would theoretically give her a "surprise loan". Through this game we learned how loans work in the community, the almost non-existent role of banks, people's perception of consequences for non-payment and their preferred lending channel: loan sharks.

Interface Prototype

We created a mobile phone on an iPad that people could interact with as if it were real. This allowed us the flexibility to change the interface of the phone after each interview if we needed to.

Inputs and Outputs

A research method to understand the inner workings of home finances, how the family distributes financial responsibility and who the ultimate decision makers of the household are.

Turkeys

Turkeys. That's all.

THE CHALLENGE

Mercy Corps partnered with BanKO, The Philippines’ first mobile-based bank, to give unconditional cash transfers to victims of Typhoon Haiyan in early 2014. These transfers—delivered by mobile phone—welcomed thousands of people into formal banking systems for the first time.

Seeing this as an opportunity, we asked, How can we use this mobile banking connection to deliver financial stability to these new clients, even after they’ve used their first cash transfers? How can we offer formal services to people who have lost all form of identification? And how can we help people begin saving again when their only savings were washed away in the storm?

WHAT WE DESIGNED

PablinKO is a loan product that can be accessed from a mobile phone, allowing a user to apply to borrow even without tax papers and other paperwork commonly required by banks. The loan leverages the positive sides of both formal and informal systems: the interest rate on the loan is well under the 20% charged by loan sharks, which are incredibly common, but it is backed by a respected bank and is much more trusted than informal loans.

LOAN HIGHLIGHTS

Mobile Banking

Mobile banking allows banks to reach people in the furthest corners of the nation. 80% of people in The Philippines are unbanked, but the country has 101% mobile phone penetration.

Accessibility to Everyone

The main obstacle to traditional bank loans are tax papers and other formal documents. PabilinKO allows you to apply by using your "Barangay" papers––relatively informal, but highly trusted, community documents.

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Door to Door Collection

Meeting people where they are increases topline costs for the bank, but it dramatically increases repayment rates—more than enough to make it worthwhile.

Stability for the Future

Once a loan is repaid, a portion of the interest rate is returned in the form of a savings account called "The Funeral Fund." This type of saving is a common practice that we adopted, and acts as life insurance in case of emergency.

MERCY CORPS' VIDEO ABOUT OUR PROJECT

A "HOW TO" ABOUT OUR RESEARCH

The "Loan Surprise" is a game we developed in the field to find out how people felt about the making financial decisions related to loans. We wrote about it so others can use it in the field too: "Loan Surprise Game" Part 1 and Part 2.