WASHINGTON, D.C., July 27, 2000
—IFC will support the creation and expansion of small and medium enterprises in the Philippines with a US$25 million investment in Planters Development Bank (PlantersBank).
IFC will provide $15 million in debt and invest about $10 million equivalent in convertible preferred shares to strengthen the bank's capital base so that PlantersBank can provide more long-term financing to small and medium enterprises (SMEs). IFC is also seeking to source about $500,000 in technical assistance to help PlantersBank sharpen its SME focus, improve risk management, and build capability in securitization to provide greater support to housing finance.
PlantersBank, a private development bank that was established in 1961 as a thrift bank, is now the largest Philippine bank specializing in SME lending. It serves the whole country, with half of its financing activities outside of Manila. PlantersBank, with total assets of about $400 million, is majority owned by the Tambunting family. The Asian Development Bank and FMO (NederlandseFinancierings-Maatschappij Voor Ontwikkelingslanden N.V.), the Netherlands development agency, are also shareholders.
At the signing ceremony, Mr. Peter Woicke, Executive Vice President of IFC, said that the growth of smaller businesses will generate jobs and economic development, and PlantersBank is uniquely placed to foster that growth. IFC has made it a priority to show through its own investments that SME lending can be an attractive business for financial institutions to pursue.
Ambassador Jesus Tambungting, Chairman of PlantersBank added that IFC's planned technical assistance will help PlantersBank reinforce its pursuit of best practices, providing other lending institutions with a model to emulate in their SME practices. Furthermore, he noted that the recent e-commerce initiative undertaken with IFC, namely PlantersBankecommerce.com, is now operational and allowing SMEs in the Philippines to web-enable their businesses.
The mission of IFC, part of the World Bank Group, is to promote private sector investments in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
