The International Finance Corp. (IFC) plans to issue loan financing to the country’s largest microfinance institutions to help them remain afloat and save jobs as the Philippines grapples with the economic impacts of the COVID-19 pandemic.
In a statement, IFC said the World Bank Group member plans to issue up to P750 million in debt financing to CARD Bank Inc. and CARD SME Bank Inc., which should primarily benefit women entrepreneurs in the country.
“The investment aims to benefit over 60,000 companies, 44,000 of which are micro, small and medium enterprises (MSMEs) owned or led by women,” IFC said.
“Support from the Women Entrepreneurs Finance Initiative (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 (SMEs),” it added.
The two microfinance institutions are part of the Center for Agriculture and Rural Development – Mutually Reinforcing Institutions Group (CARD MRI). They have more than 120 branches and serve four million customers.
“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” Jaime Aristotle B. Alip, CARD MRI, founder and chairman emeritus said.
“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,” he added.
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.
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.
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.