The Asian Development Bank (ADB), Hongkong and Shanghai Banking Corp. and Security Bank Capital Investment Corp. lent early this month to Asialink Finance Corp. some $115 million to fund the latter’s lending business to small and medium businesses, especially those led by women.
The package consisted of $50 million from ADB, $50 million from HSBC through the HSBC ASEAN Growth Fund and $15 million from the Security Bank unit. Paulton & Company served as financial advisor to Asialink for the transaction.
The project is expected to increase Asialink’s total loans to SMEs from P8.8 billion (around $150 million) to around P13 billion, with more than half of the financing dedicated to SMEs that are women-led. This would nearly double Asialink’s female entrepreneur borrowers to at least 20,000.
“Nonbank financial institutions play a key role in providing services to unbanked SMEs. This partnership between ADB and Asialink will enhance SMEs’ access to finance, especially for women entrepreneurs who face greater challenges in obtaining capital,” said ADB director-general for private sector operations Suzanne Gaboury.
The financing gap for SMEs in the Philippines is estimated at around P67 billion to P180 billion. Recent surveys showed that half of SMEs owned by men transact using bank accounts compared to only 24 percent of women. Only 14 percent of SMEs run by men received approval for bank loans, which drops precipitously for women to only 4 percent.
“This partnership with ADB marks a transformative milestone in Asialink’s mission to empower small and medium-sized enterprises across the Philippines, especially women-led businesses that remain underrepresented in the financial sector. We are optimistic that through this collaboration, we can continue to expand our presence nationwide, introduce personalized loan products, digitize and innovate our loan processes, and ultimately ensure that entrepreneurs have access to reliable financial solutions”, said Asialink chief executive Robert Jordan Jr.
Asialink was established in 1997 to become one of the leading non-bank financial institutions in the Philippines. Through 247 branches nationwide, it provides secured lending to SMEs using motor vehicles as collateral.
Asialink earlier received a P4 billion in strategic investment from Creador, a leading regional private equity investor.
