IFC sets up P500 million fund for women-led SMEs

MANILA, Philippines — The private sector arm of the World Bank Group is providing P500-million loans in a non-banking financial institution (NBFI) in the Philippines to support women-led small and medium enterprises (SMEs) in recovering from the pandemic.

The International Finance Corp. (IFC) of the World Bank Group said it is allocating P500 million to Esquire Financing Inc., the fourth largest NBFI in the Philippines.

This is IFC’s first engagement with an NBFI in the country.

As part of IFC’s Base of the Pyramid (BOP) program, the loan aims to increase access to finance for smaller businesses, especially those owned by women.

In turn, this is expected to contribute to the Philippines’ job creation and overall  economic recovery from the pandemic.

For the past two years, the country’s women and youth in the labor market bore the brunt of job losses due to the pandemic.

Filipino women in the labor force accounted for 44 percent of the job losses.

The funding will allow Esquire to grow its loan portfolio and better serve women-owned SMEs. All proceeds of the loan will be earmarked for on-lending to women-led SMEs affected by the pandemic.

Esquire Financing chairman and CEO Rajan Uttamchandani said the pandemic has resulted in the scarce long-term financing for NBFIs in the market.

“IFC’s loan will help us scale up our business and grow the women-owned SME share of our client base to 67 percent over the next three years. This will allow us to promote market competitiveness, helping the country build back better,” Uttamchandani said.

Micro, small and medium enterprises (MSMEs) in the Philippines comprise 99.5 percent of all business enterprises. They take up 60 percent of all exporters and contribute 25 percent of total export revenues. They also account for 62 percent of total employment in the country.

MSMEs were among the sectors hardest hit by the pandemic, with many of them stopping operations. Some had to turn to informal businesses and employment to cope with the impact of the crisis.

IFC Philippines country manager Jean Marc Arbogast said IFC aims to contribute toward narrowing the financing gap in the country, especially through additional loans to women entrepreneurs impacted by the pandemic.

“We are optimistic that IFC’s loan to Esquire will send a positive signal, strengthening confidence in the NBFI sector, an enabler of economic growth,” he said.

IFC’s BOP program is an initiative to help financial service providers deliver funding to small businesses, informal enterprises and low-income households that were hit hardest hit by the pandemic.

The initiative is an expansion of the $8-billion Fast-Track COVID Facility that IFC launched in 2020 as part of the World Bank Group’s response to the pandemic.