International Finance Corp. (IFC), the World Bank Group’s (WBG) private-sector arm, is supporting a new initiative to expand lending to micro, small, and medium enterprises (MSMEs) in the Philippines, particularly in underserved areas outside Metro Manila, as part of efforts to improve financial inclusion and generate more jobs.

According to an IFC disclosure dated July 1, the advisory project seeks to address financing gaps faced by MSMEs by strengthening both the broader lending market and the capabilities of financial institutions serving the sector.

The project, approved by IFC in September last year and currently under implementation, has an estimated budget of $962,317. It is scheduled to run until end-March 2027.

The initiative involves state-run Small Business Corp. (SB Corp.) and financial technology (fintech) firm First Digital Finance Corp. as clients.

At the market level, IFC will conduct assessments to identify the financing needs of MSMEs, quantify the country’s lending gap, and explore innovative investment structures that could help mobilize additional capital for MSME financing.

At the institutional level, the project will assist medium- to small-sized financial institutions in conducting diagnostics, strengthening risk management frameworks, diversifying funding sources, and adopting responsible lending practices.

“The objective of the project is to strengthen access to finance for MSMEs in the Philippines, enabling them to expand, enhance their competitiveness, ultimately driving job creation and providing more sustainable jobs opportunities,” IFC said.

The initiative is expected to lay the foundation for a broader IFC-led program aimed at expanding access to finance for MSMEs across the country, including regions beyond Metro Manila that have traditionally had limited access to formal financing.