Ayala-led Bank of the Philippine Islands (BPI) has secured financial backing from the US government's private-sector lending arm to increase lending to small businesses.
In an Oct. 2 statement, the US International Development Finance Corp. (DFC) said its board of directors approved a $75 million (over P4.2 billion) loan portfolio "guaranty" to BPI.
This guaranty, which will cover any borrower default, shall be provided in partnership with the United States Agency for International Development (USAID).
In turn, the DFC and USAID's guaranty would enable BPI to extend "$150 million in new loans to be issued to small businesses across the Philippines, with at least a quarter of them operating in the agricultural sector."
This investment in BPI formed part of the over $3.4-billion worth of projects green-lit by the DFC's board of directors for the fourth quarter of its fiscal year 2024.
For the entire fiscal year, the DFC committed to support 181 new transactions worth a total of over $12 billion in its five priority sectors, namely: agribusiness, energy, health, infrastructure, and small business support.
Another investment approved by the DFC at the sub-board level is a $475,000 insurance for Capital Sisters International Inc. to "help finance microloans for women in the Philippines."
The Colorado-based Capital Sisters is a women-founded and women-led non-profit that extends microloan financing to poor women. It also secured from the DFC $570,000 in insurance for Guatemala's indigenous and women borrowers.
"Fiscal year 2024 has been a productive and record-setting year for the DFC team, and the huge accomplishments of the fourth quarter demonstrate the enormous progress the DFC has made in meeting our mandate under the BUILD Act. Our investments around the world are boosting development in emerging economies and advancing key US foreign policy objectives," its chief executive officer (CEO) Scott Nathan said, referring to the Better Utilization of Investment Leading to Development Law that created the DFC.