The International Finance Corporation (IFC) is providing its first loan to a non-bank financial institution (NBFI) in the Philippines, which will help women-owned small and medium enterprises (WSMEs) that have been severely affected by Covid-19.

In a bid to increase access to finance for these WSMEs, the IFC announced on May 6 that it is granting a 500 million pesos (US$9.50 million) loan to Esquire Financing, the fourth largest NBFI in the Philippines, with the entire proceeds earmarked for on-lending to WSMEs.

Part of IFC’s base of pyramid (BOP) programme, the financing will allow Esquire, a market leader in the unsecured SME loan segment, to grow its loan portfolio and better serve WSMEs during and after the global pandemic.

Micro, small and medium enterprises (MSMEs) are the economic backbone of the Philippines, accounting for 99.5% of the registered businesses – 30% of them are women-owned MSMEs – and around 63% of employment in 2020. Yet, as IFC points out, 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 Esquire’s risk management framework.

Commenting on the IFC loan, Esquire chairman and CEO Rajan Uttamchandani says the facility will help the company scale up its business and grow the WSME share of its client base to 67% over the next three years. “This will allow us to promote market competitiveness, helping the country build back better,” he says.

“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,” adds IFC country manager for the Philippines Jean-Marc Arbogast.

IFC’s BOP programme 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 US$8 billion Fast-Track Covid Facility that IFC launched in 2020 as part of the World Bank Group's response to the global health crisis.

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).

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. It invests in programmes 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.