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IFC, GTZ Help Philippines’ Central Bank Spur Lending to Small Businesses


In Manila:
Art Cariaga
Phone: +632 848 7333
E-mail: Acariaga@ifc.org

In Hong Kong:
Hannfried von Hindenburg
Phone: +852 2509-8115
E-mail: hvonhindenburg@ifc.org

Manila, Philippines, July 23, 2010—IFC, a member of the World Bank Group, and GTZ, a German government development agency, are providing technical assistance to the Philippines’ central bank to strengthen its supervisory and regulatory capacity for lending to small and medium enterprises.

IFC and GTZ chose Deutsche Bank Risk Management Advisory to provide advisory services on risk management best practices.

Greater support from central bank supervisors for commercial banks specializing in lending to small and medium enterprises is expected to increase much needed credit flow to the sector. A study last year by UPS Asia Business Monitor showed that more than 83 percent of small and medium enterprises in the Philippines have experienced difficulties in accessing credit from banks.

“Many banks are interested in using new products and risk assessment methodologies to profitably address the needs of small and medium enterprises,” said Will Beloe, IFC Head of Advisory Services in the Philippines.  “The central bank recognizes this need and has made it a priority to develop a specialized team of small and medium enterprise experts.”

Commercial banks mostly lend to big businesses or salaried individuals, while rural banks focus on microfinance.  This has given rise to the “missing middle” of small and medium enterprises with limited access to financial services.

The Filipino central bank has successfully trained their supervisors to specialize in supporting microfinance institutions, and is looking at similar training to support commercial banks’ small and medium enterprise lending operations.

Lukas van der Hoef, Head of Risk Advisory Services Asia at Deutsche Bank, said, “This project is important and is part of our efforts to share the latest risk-management techniques and technology with banks and regulators around Asia to strengthen the local banking systems and ensure their stable and continued growth.”

IFC aims to increase access to financial services for small and medium enterprises globally.  This program is supported by the Canadian International Development Agency and the Australian Agency for International Development.  GTZ supports the program through its Private Sector Promotion Program.

About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit www.ifc.org.

For more information about Deutsche Bank, visit www.db.com.

For more information about GTZ, visit www.gtz.de/en.