THE Asian Development Bank (ADB) said it signed an agreement with Asialink Finance Corp. to help provide $115 million in working capital to support lending to small- and medium-sized enterprises (SMEs), with a focus on female-owned companies.
“The financing package consists of a $50-million loan from ADB, $50 million from HSBC through the HSBC ASEAN Growth Fund, and $15 million from Security Bank Corp.,” ADB said in a statement.
The ADB said this expected to increase Asialink’s total loans to SMEs from P8.8 billion (around $150 million) to around P13 billion, with more than half of the financing dedicated to SMEs that are women-owned.
It is expected to almost double Asialink’s female entrepreneur borrower network to at least 20,000 and introduce tailored offerings to female business owners.
“Nonbank financial institutions play a key role in providing services to unbanked SMEs. This partnership between ADB and Asialink will enhance SMEs’ access to finance, especially for women entrepreneurs who face greater challenges in obtaining capital,” ADB Vice-President for Market Solutions Bhargav Dasgupta said.
The financing gap for Philippine SMEs was estimated at around P67 billion to P180 billion, the ADB said, adding that half of the SMEs owned by men transact using bank accounts, compared to 24% of female-owned ones.
Additionally, 14% of SMEs led by men have received approval for bank loans, against 4% for female-led ones.
“This partnership with ADB marks a transformative milestone in Asialink’s mission to empower SMEs across the Philippines, especially women-owned businesses that remain underrepresented in the financial sector,” Asialink Finance Corp. Chief Executive Officer Robert B. Jordan, Jr. said.
Established in 1997, Asialink is a leading nonbank financial institution with 247 branches nationwide.
It offers secured lending to SMEs, accepting motor vehicles as collateral. SMEs account for more than half of its portfolio. — Aubrey Rose A. Inosante