The private sector arm of the World Bank Group, the International Finance Corp. (IFC), plans to issue up to P750 million ($15 million) in debt financing to two of the country’s largest microfinance institutions to help keep businesses afloat amid the economic and health crises.

The IFC said in a statement on Tuesday that the new loans would be issued to Card Bank Inc. and Card SME Bank Inc.; both part of the Center for Agriculture and Rural Development-Mutually Reinforcing Institutions (Card MRI) Group. According to the IFC, the Card MRI “aims to empower socially and economically challenged women and families by providing access to financial, educational, social and health services.” The group has 6.9 million clients and insures over 25 million people in the Philippines, the IFC statement said.

The IFC said in a statement on Tuesday that the new loans would be issued to Card Bank Inc. and Card SME Bank Inc.; both part of the Center for Agriculture and Rural Development-Mutually Reinforcing Institutions (Card MRI) Group. According to the IFC, the Card MRI “aims to empower socially and economically challenged women and families by providing access to financial, educational, social and health services.” The group has 6.9 million clients and insures over 25 million people in the Philippines, the IFC statement said.

The P750-million 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 IFC said.

“This 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 these businesses are led by women. The largest share of companies operates in wholesale and retail, which have been particularly affected by government’s lockdown measures against the Covid-19 pandemic.

“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” Card MRI Founder and Chairman Emeritus Jaime Aristotle B. Alip was quoted in the statement as saying.

“We believe that a poverty-free Philippines can be achieved by empowering these women to reach their full potential,” Alip said. “Through this partnership with IFC, we can reach more women-owned and led MSMEs and help them continue their journey towards a better future.”

The financing package is part of IFC’s $8-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 transaction is IFC’s first investment in the Philippines as part of its “Banking on Women” business, providing 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 microbusinesses in emerging markets, with a total estimated unmet credit demand of $1.5 trillion.

“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,” the IFC said. “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 Alip and the Card MRI Group,” Rosy Khanna, regional industry director for financial institutions-Asia Pacific at IFC, was quoted in the statement as saying. “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.”

The Card Bank and the Card SME Bank have more than 120 branches and serve four million customers, according to the IFC. Its “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 and/or led SMEs.

Courtesy by :https://businessmirror.com.ph/