IFC loan to a non-banking financial institution in PH for the benefit of women entrepreneurs

MANILA, Philippines—Small businesses run by Filipino women are set to benefit from the first ever assistance from the International Finance Corporation (IFC) to a non-banking financial institution in the country.

In a statement released Friday, May 6, the IFC announced that it had granted a loan of 500 million pesos (approximately $10 million) to Esquire Financing Inc., which was the fourth largest non-bank financing institution in the Philippines.

“As part of its ‘Base of the Pyramid’ program, this is IFC’s first engagement with a non-bank financial institution in the Philippines,” said the World Bank Group’s lending arm (WBG). ) for the private sector.

He said the loan would allow Esquire, which the IFC described as a “market leader in the segment of unsecured loans to small and medium-sized enterprises (SMEs)”, to increase its loan portfolio and better serve customers. SMEs owned by women during and after the pandemic.

“The entire loan proceeds will be used for on-lending to WSMEs, which have been severely impacted by COVID-19,” IFC said.

“The investment is also supported by a performance-based incentive from the IFC as an implementing partner of the Women Entrepreneurs Opportunity Facility (WEOF) – a partnership between the IFC and Goldman Sachs 10,000 Women – and the Women Entrepreneurs Finance Initiative (We-Fi),” he added.

Documents showed the IFC approved the funding on April 15.

“By supporting a leading non-bank financial institution and a Base of the Pyramid financier in a challenging environment, IFC will help bridge the financing gap in the country, including through additional lending to women entrepreneurs affected by the crisis. pandemic,” said Jean Marc Abrogast, Country Director of IFC Philippines.

“We are optimistic that the IFC loan to Esquire will send a positive signal, bolstering confidence in the [non-bank financing] sector, a catalyst for economic growth,” said Arbogast.

“We welcome IFC’s support at a critical time when long-term financing for non-bank financial institutions is scarce in the market. We differ from others [non-bank] and bank competitors with an exclusive focus on small businesses,” IFC said quoting Esquire Financing President and CEO Rajan Uttamchandani.

“The IFC loan will help us grow our business and grow WSMEs’ share of our customer base to 67% over the next three years. This will allow us to promote market competitiveness, helping the country to build back better,” Uttamchandani said.

The IFC noted that micro, small and medium-sized enterprises (MSMEs) make up 99.5% of businesses in the Philippines and that 30% of MSMEs are owned by women, although “limited access to finance is hindering their growth”.

IFC said its Base of the Pyramid program aims to “help financial service providers provide financing to small businesses, informal businesses and low-income households that have been hardest hit by the lockdowns and economic downturn caused by the COVID-19 pandemic.”

An IFC report last year showed that the share of sales of women-owned businesses in the Philippines fell at a faster pace in 2020 alongside tougher times brought on by the pandemic-induced recession.

But the same IFC report had also shown that equipping Filipino women with digital skills and tools would enable them to capture a significant share of Asean’s booming e-commerce industry over the next five to ten years. coming years.


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