In a bid to increase access to finance for smaller businesses, especially women-owned ones, IFC is providing a PHP500 million (approximately US$10 million equivalent) loan to Esquire Financing Inc., the fourth largest non-bank financing institution (NBFI) in the Philippines. The funding will help drive the economy, creating jobs, and accelerating post-COVID recovery in the country.
Part of its Base of the Pyramid (BOP) program, this is IFC’s first engagement with an NBFI in the Philippines. The funding will allow Esquire, a market leader in the unsecured small and medium enterprises (SME) loan segment, to grow its loan portfolio and better serve women-owned SMEs (WSMEs) during and after the global pandemic. The entire proceeds of the loan will be earmarked for on-lending to WSMEs, which have been severely affected by COVID-19.
“We welcome IFC’s support at a critical time when long-term finance for NBFIs is scarce in the market. We differentiate ourselves from other NBFI and bank competitors by focusing exclusively on small businesses. IFC’s loan will help us scale up our business and grow the WSME share of our client base to 67 percent over the next three years. This will allow us to promote market competitiveness, helping the country build back better,” said Rajan Uttamchandani, EFI’s Chairman and CEO.
Micro, small, and medium enterprises (MSMEs) are the economic backbone of the Philippines, accounting for 99.5 percent of registered businesses—30 percent of them women-owned MSMEs—and around 63 percent of employment in 2020. Yet, limited access to finance deters their growth. In response, IFC, through its advisory services, with support from the Australian government, will help create a robust institutional environment by strengthening EFI’s risk management framework.
“By supporting a leading NBFI and BOP financier amid a challenging environment, IFC will contribute toward narrowing the financing gap in the country, especially through additional loans to women entrepreneurs impacted by the pandemic”, said Jean Marc Arbogast, IFC Country Manager for the Philippines. “We are optimistic that IFC’s loan to Esquire will send a positive signal, strengthening confidence in the NBFI sector, an enabler of economic growth.
IFC’s BOP program is an initiative to help financial services providers deliver funding to small businesses, informal enterprises, and low-income households that have been hit the hardest by the lockdowns and economic slowdown caused by the COVID-19 pandemic. The initiative is an expansion of the $8 billion Fast-Track COVID Facility that IFC launched in 2020 as part of the World Bank Group’s response to COVID-19.
The investment is also supported by a performance-based incentive from IFC as the implementing partner of Women Entrepreneurs Opportunity Facility (WEOF)—a partnership between IFC and Goldman Sachs 10,000 Women—and the Women Entrepreneurs Finance Initiative (We-Fi).
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
The Women Entrepreneurs Finance Initiative (We-Fi) is a collaborative partnership among the 14 governments that have made financial contributions, six multilateral development banks that serve as implementing partners, and other public and private stakeholders. We-Fi was formally established in October 2017 as a Financial Intermediary Fund hosted by the World Bank. We-Fi invests in programs and projects that help unlock billions of dollars in financing to address the full range of barriers facing women entrepreneurs—increasing access to finance, markets, technology, and mentoring, while strengthening policy, legal and regulatory frameworks. As one of the We-Fi Implementing Partners, IFC supports private sector clients with investment and advisory services to expand financial services and market access for women-owned/led firms, as well as increasing the capacity of women entrepreneurs to run high-growth businesses. For more information, visit www.we-fi.org.
About Goldman Sachs 10,000 Women
Goldman Sachs 10,000 Women is an initiative to foster economic growth by providing women entrepreneurs around the world with a business and management education and access to capital. The initiative has reached women from over 200 countries through a network of over academic, nonprofit, and bank partners. In partnership with the International Finance Corporation (IFC), Goldman Sachs 10,000 Women launched the first of its kind global finance facility in 2014 to enable access to capital to more women entrepreneurs. And now, by leveraging technology the 10,000 Women curriculum is available online through Coursera, creating access to a business education in more corners of the world. For more information on Goldman Sachs’ philanthropic investment in female entrepreneurs, visit https://www.goldmansachs.com/citizenship/10000women/