SCCI Inks Cooperation with Cordaid on Remittances

In 2008, Cordaid and SCCI inked an agreement to create models on how remittances could be leveraged for development through microfinance. The cooperation consists of a guarantee mechanism from Cordaid for OFW investments to SCCI and conduct of financial literacy trainings to both remittance senders and receivers.

Cordaid is one of the world's biigest international development organizations with a network of almost a thousand partner organizations in 36 countries in Africa, Asia, Central and Eastern Europe and Latin America. It has more than 90 years of experience in emergency aid and structural poverty eradication. The counterpart bodies work on various themes, including healthcare, quality of urban life, access to markets, and peace and conflict.

CORDAID GUARANTEE TO OVERSEAS FILIPINO INVESTMENTS

The Sustainable Investment Fund is an alternative investment option to Overseas Filipinos - workers, migrants and immigrants. Because it will be used to extend loans to microfinance institutions and social enterprises (SEs), this fund does not only give positive economic returns; it is socially responsible as well.

When Overseas Filipinos invest a minimum of PhP50,000.00 for at least six months in the Sustainable Investment Fund, they are then referred to as social investors. The greater the amount and the longer the investment term, the more social investors grow their money and help MFIs and SEs.

SCCI will execute a loan agreement and a Deed of Assignment of Receivables in favor of the social investor. Postdated check/s shall be issued to the social investor covering the principal and interest due. In the event that a social investor terminates an investment before the maturity date, the interest rate will automatically revert to 3% per annum. A 30-day notice is required to pre-terminate an investment.

Through SCCI’s partnership with Cordaid, each OFW investor may have his/her investments guaranteed by paying a fee of 1.5% of their invested amount per annum. This percentage will be deducted from the interest rate detailed in the table above. The maximum coverage is PhP250,000 worth of investments.

Recognizing the need to extend financial education to this sector, Cordaid is supporting SEDPI's thrust to provide financial literacy trainings to Filipino remittance senders abroad and remittance receivers in the Philippines.

The Financial Literacy for Remittance Senders will be conducted in Europe, Asia, the Middle East and the United States to Filipino communities. On the other hand, Financial Literacy for Remittance Receivers will be held in eight different locations in the Philippines in partnership with various microfinance institutions.