MANILA, Philippines - The International Finance Corp. (IFC) will provide a seven-year loan of up to P700 million to support projects of micro, small, and medium enterprises (MSMEs), microfinance borrowers, and women in rural Philippines.
The loan was extended to CARD Bank Inc (P540 million) and CARD SME Bank Inc. (P160 million).
The IFC is a member of the World Bank Group tasked to make equity investments, offer grants and extend technical assistance.
With the loan, CARD Bank can now grow its microfinance client base and establish new branches, especially in rural areas.
CARD Bank and CARD SME Bank chairman Jaime Aristotle B. Alip said both banks were founded to help poor people work themselves out of poverty
“We are privileged to have IFC as a long-time partner in our mission,” Alip said.
IFC has provided advisory services to CARD Bank since 2007, when it helped develop a SME lending platform, which CARD SME Bank implemented in 2009.
In 2013, IFC helped CARD SME Bank design an agri-finance strategy which was expanded in early 2015 to reach more regions and farmers. The following year, IFC assisted CARD-Pioneer Micro-Insurance develop insurance products to protect farmers from typhoon risks.
Almost three-quarters of the poor in the Philippines live in rural areas. Poverty among farmers is three times higher than in other sectors. Without access to formal financial institutions, a majority of the population borrows from informal sources.
Increasing MSME access to financing will enable the sector to create jobs, while affordable microfinance will better meet the capital needs of the poor.
IFC Financial Institutions Group Global director Marcos Brujis explained that IFC’s experience worldwide provides evidence that making loans more affordable to people and MSMEs through formal financial institutions quickens the pace at which people are lifted out of poverty.
“We commend CARD Bank and Card SME Bank for their efforts to reduce poverty among their clients,” he added.
IFC Philippines country manager Jane Yuan Xu said the World Bank’s mission is how to share prosperity that is, inclusive growth.