To increase small business lending in Philippines, IFC invests $130 M in Asialink
The International Finance Corporation (IFC) announced on Tuesday that it will invest up to $130 million in Asialink Finance Corporation (AFC) as part of its efforts to increase financial inclusion in the Philippines.
With at least 60% of loan proceeds designated for women-owned or led MSMEs (WMSMEs), the investment will assist AFC in growing its financing for MSMEs, according to a statement from IFC.
In addition to providing funding, IFC will support the company’s implementation of responsible finance principles and an Environmental and Social Management System framework in accordance with global best practices.
“We hope to demonstrate the viability of lending to this sector and encourage other players to develop solutions that cater to MSMEs,
“Because ultimately, we are not just funding companies, we are creating jobs at the grassroots level. Every loan to an MSME can mean five, ten or twenty new jobs in local communities. And that’s what drives an economy forward,” said Jane Yuan Xu, Acting Country Manager for IFC Philippines.
The statement claims that since AFC can assist underserved or unbanked MSMEs and individuals—the majority of whom lack the collateral required to obtain bank financing—financial inclusion is at the heart of its strategy.
According to Robert B. Jordan Jr., CEO of Asialink Finance Corporation Group of Companies, the investment will enable the company to increase the number of MSMEs it lends to, especially those in underserved areas of the nation and those that have traditionally been shut out of the formal financial sector.
“MSMEs are the backbone of the Philippine economy, but in many parts of the country it’s still a huge struggle to access the financing they need to grow and thrive. With this investment, we will help change that,” he added.
Despite the fact that 75% of MSMEs are situated outside of Manila, according to data from the Bangko Sentral ng Pilipinas (BSP), only 14% of loans from the banking system go to businesses outside of the capital.
The country’s level of financial penetration is extremely low, particularly for women, according to the 2021 BSP Financial Inclusion Survey.
Compared to 26% of men, only 20% of women have formal bank accounts.
IFC made investments in Salmon and First Circle, two fintech companies that serve consumers and MSMEs who are unable to access the official credit market, in 2024.
In order to encourage women in low- and lower-middle-income groups to invest in small businesses to augment their family’s income in addition to payments for housing, healthcare, and education, IFC invested $100 million in a social bond issued by City Savings Bank in July 2024.
The largest international development organization concentrating on the private sector in emerging markets is IFC, a part of the World Bank Group.
The company operates in over 100 nations, leveraging its resources, experience, and connections to open up markets and opportunities in underdeveloped nations.
