International Finance Corp., a member of the World Bank Group, said Tuesday it plans to issue up to P750 million in debt financing to CARD Bank Inc. and CARD SME Bank Inc. to reach out to women entrepreneurs in the Philippines who need financial support.
Card Bank and Card SME bank are part of the Center for Agriculture and Rural Development-Mutually Reinforcing Institutions Group.
“Filipino women entrepreneurs are fighting to recover from the grave effects of the pandemic, and we are right behind them every step of the way” said CARD MRI founder and chairman emeritus Jaime Aristotle Alip.
The loan, which is part of the $8-billlon global COVID-19 fast-track financial facility, is expected to help businesses emerge profitable and save jobs in the process during this challenging period.
The investment aims to benefit over 60,000 companies that include 44,000 micro, small and medium enterprises owned or led by women.
The banks will serve as conduits to over 120 branches nationwide.
Support from the Women Entrepreneurs Finance Initiative or We-Fi in the form of performance-based incentives will help the banks reach pre-defined targets for lending to women-owned/led small and medium-sized enterprises.
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.
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.
“We believe that a poverty-free Philippines can be achieved by empowering these women to reach their full potential. Through this partnership with IFC, we can reach more women-owned and led MSMEs and help them continue their journey towards a better future,” Alip said.
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.
IFC regional industry director for financial Institutions Asia Pacific Rosy Khanna said the financial corporation has a long-standing relationship with the CARD MRI Group.
“The success of women-owned businesses in the Philippines is critical to the success of the overall economy. Our investment will help provide much-needed working capital at a crucial time for micro, small and medium sized businesses, helping them to sustain operations and save jobs so they are on a better footing for a successful post-crisis recovery,” she said.
The transaction builds on a relationship between IFC and CARD MRI that began in 2007, when IFC helped CARD MRI develop an SME lending platform.
Since then, the two institutions have worked together on a series of initiatives, including agri-finance, digital risk management and the Binhi Crop Insurance Program, which protects farmers from the adverse effects of natural disasters.
The transaction is IFC’s first investment in the Philippines as part of its Banking on Women Business, 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. 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.
CARD MRI aims to empower socially and economically challenged women and families by providing access to financial, educational, social and health services. It has 6.9 million clients and insures over 25 million people in the Philippines.