The Philippines stands to benefit from recent regional investments made by the International Finance Corp. (IFC) to help struggling small and medium businesses.
Documents showed that the board of the World Bank Group's private-sector lending arm is scheduled to approve on Jan. 2, 2025 an up to $300-million unfunded risk participation facility (RPF) with global banking giant Citibank N.A.
This forthcoming blended finance project of the IFC shall support a loan portfolio aimed at financing micro, small and medium enterprises (MSMEs)—especially those owned and led by women—in the following emerging Asian economies: the Philippines, Bangladesh, Indonesia, Malaysia, Sri Lanka, Thailand and Vietnam.
The IFC said it will provide risk coverage not exceeding half of the total portfolio, or a $150-million maximum investment. This facility would have a tenor of as long as five years.
"The project is expected to be supported by the Global Small and Medium Enterprise Facility (GSMEF) and Women Entrepreneurs Finance Initiative (We-Fi)," both of which the IFC is the implementing entity, it added.
Meanwhile, the IFC's $50-million investment in Mauritius-based fund manager Creador Management VI Ltd. approved this December was expected to "increase access to private equity capital and value creation for mid-market companies in South and Southeast Asia with a primary focus on India, Malaysia, Indonesia, Vietnam, and the Philippines."
"In Southeast Asia, investment is concentrated in Singapore, with limited activity in the growth equity space where the [Creador VI] fund will operate in the target markets... The IFC's investment into Creador will support the fund in continuing to show the scalability and long-term viability of the private-equity model operating in Southeast Asia outside Singapore," it noted.
Creador VI L.P. targets to raise a total of $800 million.
Last November, the IFC also green-lit its anchor $30-million investment in Tokyo, Japan-based GI Capital Management Ltd. for its eight-year Asia Debt Opportunities Fund II (ADOF II) focusing on asset-backed credit portfolios, distressed debt, single assets and special situations.
The $300-million ADOF II can be tapped by the financially stressed firms in the Philippines, Bangladesh, Cambodia, India, Indonesia, Malaysia, Mongolia, Nepal, Sri Lanka, Thailand as well as Vietnam.
"The [ADOF II] project will provide financing in loans to mid-market companies, enabling them to recover their business operations, avoid liquidation, and preserve jobs... The IFC expects that the project will attract potential investors and new funds in the private credit space to enter and crowd-in more private capital to scale up lending to distressed assets and special situations, contributing to the secondary market development across Asia," it said.