THE private-sector arm of the World Bank, the International Finance Corp. (IFC), has extended a P1.79-billion loan to a local special purpose vehicle (SPV) to purchase nonperforming assets from local banks and financial institutions.
The IFC granted the loan to ACP Investments One Inc. Through the purchase of nonperforming assets, the loan will enable banks to free up capital and increase their lending to businesses that will create more jobs.
“IFC’s Debt and Asset Recovery Program has allowed banks to off-load up to $21.5 billion in nonperforming loans and helped 4.9 million families and small enterprises normalize their financial obligations,” IFC Resident Representative Jesse Ang said.
“People were able to save their homes and other assets, while the enterprises’ renewed access to formal credit kept their businesses going and preserved existing jobs or created new ones,” he added.
The seven-year senior loan is part of IFC’s Debt and Asset Recovery Program.
The program helps financial institutions in various countries off-load nonperforming assets.
These assets, when purchased, will enable banks and financial institutions to extend more credit to enterprises, especially in rural sectors where access to finance is limited.
Established in Manila in 2005, Altus Capital Corp. has expertise in establishing and managing portfolios of nonperforming loans and distressed real-estate assets. It owns ACP Investments One Inc.
It is the manager for the P9 billion worth distressed-asset portfolios acquired from Rizal Commercial Banking Corp. and Plantersbank through SPVs that IFC helped finance in 2013.
“This effort will build the capacity of local asset managers by bringing in global best practices in asset resolution,” ACP Investments One Inc. President Benjamin C. Sevilla said.
Philippine banks, particularly the large universal and commercial banks, IFC said, held some P140 billion worth of nonperforming loans and P135 billion in distressed real and other properties as of September 2014.
IFC is considered the largest global-development institution focused exclusively on the private sector.
In FY14, IFC provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development.