Why financing women entrepreneurs can turn around economy | Inquirer Business
MAPping the Future

Why financing women entrepreneurs can turn around economy

MARCH being International Women’s Month, I have chosen to write about a topic that has been discussed lengthily in both international and local fora.

Several studies noted that while women-owned enterprises comprised a major part of formal SMEs (small and medium enterprises) in emerging markets, these businesses were observed to exhibit slower growth rates than those owned by men. A major reason for this is the women’s difficulties in securing financing.


In a 2014 report, the Apec Business Advisory Council (Abac), a private sector body assisting leaders of the Asia-Pacific Economic Cooperation,  recommended “to identify and remove barriers to women’s participation in high growth potential sectors to support the growth of SMMEs (small, micro and medium enterprises).” At the recent Apec Women and the Economy Forum hosted by the Philippines in September 2015, a recommendation was also given for the adoption of a gender lens in establishing financial support and training for women with businesses.

Apparently, access to finance continues to be a major constraint faced by women entrepreneurs.


Gender lens financing

Advocates of economic empowerment for women have proposed the concept of “gender lens” in evaluating opportunities for investing and financing.  Using this concept would put importance to projects that deliver greater impact on women, young and old—whether it supports women leadership, women’s access to capital, and provides 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.

Ilaw program

In support of its advocacy for the economic empowerment of women, the Women’s Business Council Phils. Inc. (WomenBizPh) signed a memorandum of understanding with the Development Bank of the Philippines (DBP) on Nov. 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 their enterprises; 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 DBP to tap the assistance of WomenBizPh members, many of whom are successful businesswomen who can mentor and advise Ilaw borrowers.

Women entrepreneurs are given priority by the DBP Ilaw Program since it simplifies the lending procedures, creates a dedicated financing window, provides flexible collateral policies and customizes the repayment schedules.

Borrowers eligible to avail 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 members are women.  Enterprises must have an asset size of not more than P100 million, although startups may apply and be approved on a case-by-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 project cost may be borrowed.

Program status

To date, P434 million has already been approved under the Ilaw program, of which P367 million has been released, benefiting 49 women-owned enterprises engaged in a wide range of businesses such as manufacturing, general merchandise, services, agribusiness, wholesale and retail.

Quoting an entrepreneur who recently availed of an Ilaw loan, “We are very happy that DBP introduced this program geared toward the special needs of women entrepreneurs.  Women entrepreneurs are usually scared to apply for a loan.  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 received a merit award from the Association of Development Financing Institutions of Asia and the Pacific.

For more information about the Ilaw program, you may contact any of the following DBP officers:

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines (MAP).  The author is the chair of the MAP programs committee, the president of Mageo Consulting, Inc. and the chair of the  Women’s Business Council Philippines, Inc. Send your feedback to [email protected] and [email protected]  For previous articles, please visit map.org.ph.)

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