How Esquire Financing and IFC Support SMEs Post-COVID

The pandemic took a toll on businesses worldwide, and the Philippines was not spared. SMEs in the country were more heavily hit. According to a 2021 report by the Asian Development Bank, the country’s economy moved to the recovery stage six months after lockdowns were imposed in March 2020. However, micro, small, and medium enterprises or MSMEs still suffered a sharp decline in sales and revenue as they were not ready with a business strategy during a pandemic.

With the availability of vaccines, the number of COVID-19 cases has dropped. Cases have also been noted to be less severe. Though the danger is still present, certain precautions have led the government to implement less strict quarantine restrictions, allowing more businesses to operate at almost the same capacity as before the pandemic. This is great news for MSMEs.

The IFC and EFI: Helping Filipino Entrepreneurs

However, some businesses still have problems recovering. Being aware of this situation, theInternational Finance Corporation (IFC) decided to extend loans to local SMEs for post-COVID business recovery. A sister organization of the World Bank, IFC has been helping businesses around the world by providing advice, asset management, and private investments for more than 60 years. For their recent investment in the Philippines, the IFC decided to partner with another trusted institution—Esquire Financing Inc. (EFI).

The goal of the partnership between IFC and EFI is to make financial assistance easily accessible to SMEs during and post the pandemic. By increasing EFI’s loan portfolio, more entrepreneurs can get access to business loans. The loans will be offered exclusively to women-owned SMEs or WSMEs. The investment is part of IFC’s Base of the Pyramid Program, which aims to help small businesses, informal enterprises, and low-income households recover from the economic slowdown brought about by the COVID-19 pandemic by providing funding in the form of loans to microfinance institutions, non-bank financial institutions, and MSME-focused banks. Esquire Financing is the first non-bank financial institution that IFC has worked with in the Philippines.

MSMEs compose a big portion of registered businesses in the country, 99.5% according to a 2020 report by the Department of Trade and Industries. However, these businesses have very limited access to financial assistance, which hinders their growth.

During the pandemic, WSMEs particularly faced a lot of hurdles. In a survey by the Supporting Women’s Economic Empowerment (WEE) reported by the Philippine Commission on Women, it was revealed that the majority of the participating WSMEs have suspended their operations temporarily. Aside from the lack of access to their raw materials due to the lockdowns, the lack of financial assistance was cited as one of the reasons for the closures or limited operations. Cash flow was identified as a challenge in their business recovery. Though loans are available, they did not apply for one either because they are not aware of it or because they were discouraged by the documents required to process the application.

Socio-cultural norms also affected how women managed their businesses during the pandemic. As unpaid care work is often the responsibility of women, women found it hard to balance their business and their housework such as childcare, keeping their household sanitary, and caring for sick family members.

With the P500-million loan extended by ICF to EFI, a lot of WSMEs will have opportunities after COVID-19 to recover, which will in turn help the country’s economy.

The IFC could not have chosen a better partner in the Philippines, as EFI is different from banks and other non-bank financial institutions in the country. Focusing on helping small businesses since it was established in 2011, EFI understands the unique needs of MSMEs. For example, EFI knows that MSMEs may not have the documents required by big banks to secure a loan, so they have only minimal documentation requirements. As mentioned earlier, women entrepreneurs were discouraged by the requirements for loans, so they chose not to avail of them. EFI also understands that time is of the essence, which is why EFI promises to release loans in as short as 7 days or even earlier. With the IFC and EFI partnership, MSMEs can have a better business strategy after COVID-19.

How to Avail of Esquire Financing SME Loan

Getting a business loan from EFI is as easy as 1-2-3.

1. Visit the Esquire Financing Inc website (https://www.esquire.com.ph/). On the home page, fill out the application form with your personal and business details and click “Apply Now.” You may also download the application form available on the website.
    
2. Submit the minimal documentary requirements, which include the following:
    
   1. TIN ID and one (1) valid government-issued ID of the principal borrower
   2. Latest three (3) months of bank statements and bank certification
   3. Photocopy of valid Mayor’s Permit
   4. Photocopy of valid Barangay Business Clearance
   5. 2x2 ID picture of the principal borrower
   6. Proof of billing for business and residence
   7. Pictures of the business (internal and external)
   8. Hand-drawn sketch map of the business and residence
       
3. Wait for your loan to be released within 7 days or less. If everything is in order, your loan application has a high chance of being approved.
   SMEs can borrow up to P10 million to boost their business. EFI offers flexible terms, as it considers a business’ cash flow in determining the loan amount and the term length. 

If you think your business can benefit from the partnership of IFC and EFI, don’t hesitate to reach out to us to fuel your business dreams. Let us help you, so we can recover from the pandemic together and build back a better Philippines. Connect with our team through our Facebook Page and let us drive more success to your business!