Women entrepreneurs in the Philippines are seen to benefit from new loans set to issue by a World Bank Group member-institutions to two of the country’s largest microfinance institutions.
In a statement on Tuesday, the International Finance Corp. (IFC) announced its plan to issue up to P750 million in debt financing to CARD Bank Inc. and CARD SME Bank Inc. which are part of the Center for Agriculture and Rural Development–Mutually Reinforcing Institutions Group (CARD MRI).
The loan is expected to help keep businesses afloat and save jobs as the Philippines grapples with the economic impacts of the coronavirus disease 2019 (Covid-19) pandemic, according to IFC.
It said the investment aims to benefit over 60,000 companies, 44,000 of which are micro, small and medium enterprises (MSMEs) owned or led by women. The banks have more than 120 branches and served 4 million customers.
IFC added that support from the Women Entrepreneurs Finance Initiative (We-Fi) in the form of performance-based incentives will help the banks reach pre-defined targets for lending to women-owned/led SMEs.
We-Fi is a collaborative partnership among the 14 governments that have made financial
contributions, six multilateral development banks that serve as implementing partners, and other public and private stakeholders. It was formally established in October 2017 as a Financial Intermediary Fund hosted by the World Bank (WB).
The WB member explained that the funding will provide critical working capital to MSMEs, which have been especially disadvantaged by the pandemic due to the lack of funding buffers and capacity to restart operations during strict quarantine periods.
“MSMEs account for 99.5 percent of businesses in the Philippines. More than half of those businesses are led by women, and the largest share of companies operate in wholesale and retail, which have been particularly impacted by Covid-19,” it highlighted.
IFC said the financing package is part of IFC’s P8-billion global Covid-19 fast-track financing facility, aimed at helping businesses stay afloat during the ongoing public health crisis. The loans are being provided through IFC’s Working Capital Solutions Program, a $2-billion facility that provides funding to emerging-market banks to extend credit to help businesses shore up their working capital.
The institution added that the transaction is its first investment in the Philippines as part of its Banking on Women business program, which provides financing and expertise to financial institutions to help them profitably finance women-owned businesses.
“Women customers present a substantial growth opportunity for financial institutions and financial-technology companies, known as fintechs (financial technology). Women own and lead roughly 9.7 million formal SMEs and 63.8 million micro-businesses in emerging markets, with a total estimated unmet credit demand of $1.5 trillion,” it noted.
IFC said the transaction builds on its relationship with CARD MRI. In 2017, IFC helped CARD MRI develop an SME lending platform. Since then, the two institutions have worked together on a series of initiatives, including agrifinance, digital risk management and the Binhi Crop Insurance Program, which protects farmers from the adverse effects of natural disasters.
“We are delighted to continue our long-standing relationship with Dr. Alip and the CARD MRI Group,” Rosy Khanna, regional industry director for Financial Institutions Asia Pacific at IFC, was quoted as saying.