Radiowealth Loan (IFC-39610)

Countries
  • Philippines
Geographic location where the impacts of the investment may be experienced.
Specific Location
Nation wide
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Proposed
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
B
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
May 31, 2017
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
RADIOWEALTH FINANCE COMPANY, INC.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 20.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Project Cost (USD)
$ 20.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Aug 1, 2018

Disclosed by Bank Apr 21, 2017

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

The Project is to provide a Philippine Peso senior loan of up to PHP1 billion (approximately US$20 million) (“the Loan”) to Radiowealth Finance Company, Inc. (“Radiowealth Finance” or “the Company”). Through the investment IFC will support Radiowealth Finance to expand its financing activities, which are targeted towards the small and micro-enterprise sector in rural areas.

Incorporated in May 1964, Radiowealth Finance has a certificate of authority to operate as a finance company from the Securities and Exchange Commission granted in March 1996. The Company’s portfolio is heavily concentrated in micro and small entrepreneurs with more than 80 percent of its portfolio and average loan size of PHP200,000 (US$4,000). As of March 2017, Radiowealth Finance has 126 branches and 97 sales extension and business center offices strategically located nationwide covering a total of 1,634 municipalities or 80 percent of Philippine municipalities. This nationwide outreach compared with the more region-specific presence of its financing competitors allows the Company to serve a broader range of micro and small borrowers.

The project expected impacts are (i) Promote financial inclusion and deepening of the financial market through supporting non-bank financial company to expand its lending activities to small and micro borrowers in rural areas in the Philippines (ii) Increase access to finance for small and micro entrepreneurs and individuals, including women-owned SMEs in rural areas, which will in turn increase financial inclusion, employment and reduce poverty in the Philippines. (iii) Improve the non-bank financial sector by bringing in best practices in risk management and lending to micro and small borrowers.

Radiowealth Finance is a member of the Guevent Group of Companies. As of September 30, 2016, Guevent Investments Development Corporation (“GIDC”), an investment holding company owned and controlled by the heirs of Mr. Domingo M. Guevara, Sr., owned 51.13 percent, Arocrest Investment Holding Corporation (“Arocrest”), a private investment company majority owned by Singapore-based, Azure King Pte. Ltd., owned 12 percent and individual shareholders which are related to Guevara family owned 36.87 percent.

GIDC was founded in 1961 by Domingo M. Guevara, Sr., a self-made Filipino industrialist and entrepreneur. Mr. Guevara started the group through the manufacture and sale, under license, of Radiowealth brand electric appliances. The group diversified into the assembly and sale of automotive vehicles in the 1960s, when they received the exclusive license to assemble the Volkswagen Bug automobile. This vehicle proved to be very popular and was the foundation of the family’s wealth. Now GIDC has major investments in real estate development and interests in finance, insurance, transportation solutions, information and mobile communication technology solutions, gaming, medical services and hospitality services. It has also recently entered the agri-industrial and green technology sectors.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.
Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

Incorporated in May 1964, Radiowealth Finance has a certificate of authority to operate as a finance company from the Securities and Exchange Commission granted in March 1996. The Company’s portfolio is heavily concentrated in micro and small entrepreneurs with more than 80 percent of its portfolio and average loan size of PHP200,000 (US$4,000). As of March 2017, Radiowealth Finance has 126 branches and 97 sales extension and business center offices strategically located nationwide covering a total of 1,634 municipalities or 80 percent of Philippine municipalities. This nationwide outreach compared with the more region-specific presence of its financing competitors allows the Company to serve a broader range of micro and small borrowers.

Radiowealth Finance is a member of the Guevent Group of Companies. As of September 30, 2016, Guevent Investments Development Corporation (“GIDC”), an investment holding company owned and controlled by the heirs of Mr. Domingo M. Guevara, Sr., owned 51.13 percent, Arocrest Investment Holding Corporation, a private investment company majority owned by Singapore-based, Azure King Pte. Ltd., owned 12 percent and individual shareholders which are related to Guevara family owned 36.87 percent.


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

ACCOUNTABILITY MECHANISM OF IFC

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

How it works

How it works