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Financial access for women entrepreneurs: Why we need it, how it works

boots geotina-garciaSeveral studies have noted that while women-owned enterprises comprise a major part of formal small and medium enterprises (SMEs) in emerging markets, these SMEs were observed to exhibit slower growth rates than businesses owned by men. The major reason? Difficulty in securing financing for their businesses. In the 2014 report of the Apec Business Advisory Council, the recommendation was made “to identify and remove barriers to women’s participation in high-growth potential sectors to support the growth of SMEs.”

Further, at the recent Apec Women and the Economy Forum hosted by the Philippines in September 2015, a recommendation was made during the High-Level Policy Dialogue (HLPD) on Women and the Economy to adopt a gender lens in establishing financial support and training for businesses owned by women.  Access to finance continues to remain as a major constraint faced by women entrepreneurs.

Using the “gender lens” in financing

Advocates of economic empowerment for women have proposed the concept of a “gender lens” in evaluating opportunities for investing and financing.  Using a gender lens would give importance to projects that deliver greater impact to women, young and old; support women leadership; provide women access to capital; and offer products and services beneficial to women and girls, among others.  The interest in gender lens investing is driven by the recognition that empowering women is a powerful catalyst for economic gain and positive social change, and that the economic prosperity of a country may be influenced by the role that women play.

The “Ilaw” program

In support of its advocacy for the economic empowerment of women, Women’s Business Council Phils. Inc. (WomenBizPh) signed a memorandum of understanding (MOU) with the Development Bank of the Philippines (DBP) on November 11, 2014, to create a lending window called “Inclusive Lending for Aspiring Women Entrepreneurs” (Ilaw).

The objectives of Ilaw are:  1) to empower women by providing financial support to women entrepreneurship; 2) to help businesses grow beyond micro credit; 3) to create jobs and build local economies; and 4) to access the network and expertise of women’s organizations. The MOU allows the DBP to access WomenBizPh members, many of whom are successful businesswomen who can provide the benefit of mentoring and advice to Ilaw borrowers.

Women entrepreneurs are given priority by the DBP Ilaw Program by simplifying the lending procedures, creating a dedicated financing window, providing flexible collateral policies and customizing the repayment schedules.

Borrowers eligible to avail themselves of the Ilaw Program may be single proprietorships with women principals, partnerships having at least one woman partner, corporations with a woman CEO or COO, and cooperatives where majority of the women are members.  Enterprises must have an asset size of not more than P100 million, although start-ups may apply and be approved on a case-to-case basis.

Loan proceeds may be used for working capital production, financing of confirmed purchase orders and letters of credit, and fixed asset acquisition. The minimum loan amount is P300,000, and up to 90 percent of the project cost may be borrowed.

Ilaw’s impact to date

To date, a total of P434 million has been approved under Ilaw, of which P367 million has been released, benefiting 49 qualified women-owned enterprises engaged in a wide range of businesses. These include manufacturing, general merchandise, services, agribusiness, wholesale and retail. Quoting an entrepreneur who recently availed herself of an Ilaw loan, “We are very happy that the DBP introduced this program geared toward the special needs of women entrepreneurs.  Women entrepreneurs are usually scared to apply for a loan. The DBP went to our store and office and guided us on the best options available from the bank, such as a loan and credit line.  The processing was fast and we did not need too many papers to submit because the account officer guided us all the way.”

In May 2015 the Ilaw Program was the recipient of a Merit Award from the Association of Development Financing Institutions of Asia and the Pacific. Through this partnership with the DBP, WomenBizPh aims to bridge the gap in women’s access to finance and enable women to realize their entrepreneurship potentials and achieve economic empowerment.

For more information about the Ilaw Program, you may contact any of the following DBP Officers:

SAVP Aurora C. Maghirang—[email protected]; AVP Maria Ana Visitacion M. Domingo—[email protected]; Manager Angelito B. Acupan—[email protected].

Ma. Aurora “Boots” Geotina-Garcia is chairman of Women’s Business Council Philippines Inc.
([email protected]), and chairman of the Bases Conversion and Development  Authority.


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