geo/philippines
Washington, D.C., November 7th, 2019 – UBX became the newest member of the SME Finance Forum, a global membership network that brings together financial institutions, technology companies, and development finance institutions to share knowledge, spur innovation, and promote the growth of SMEs.
John Brisco has an extensive background and experience in the FinTech space.
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The Philippine economy in particular has been consistently growing by 5.3% per year, driven by favourable economic conditions and strong macroeconomic fundamentals. However, this promising growth can only be achieved sustainably and inclusively if roadblocks currently faced by the lifeblood of the country’s economy - its small and medium-sized enterprises (SMEs) - are addressed.
Originally posted on WEF website.
This primer provides a quick reference on the “Magna Carta for Micro, Small and Medium Enterprises (MSMEs)”, a landmark legislation that defines the current national policy to promote, support, strengthen and encourage the growth and development of MSMEs. Enacted by the Philippine Congress in 1991 as Republic Act 6977, and amended by Republic Act 8289 in 1997, and further amended by Republic Act 9501 in 2008, the law is geared towards the development of the Filipino entrepreneurial spirit by providing a business environment conducive for MSMEs.
Fintechs understand the importance of access to finance for SMEs and so do companies.
With about 95 percent of SMEs contributing as much as 30 percent of the country’s gross domestic product and are employing about 60 percent of the country’s workforce, companies like First Circle are rising to the occasion. The company, which provides business financing for SMEs in the Philippines will soon be launching a credit facility worth up to $30 million, according to the article.
The Bangko Sentral ng Pilipinas (BSP) is working with the Japanese government to develop a database that will measure the creditworthiness of small and medium enterprises (SMEs) in the country.
News via Manila Times.
Fintech based in the Philippines passionate about creating opportunity by building tools for financial institutions and MSMEs.
OneConnect announced their partnership with Union Bank’s wholly-owned fintech subsidiary UBX to build what they claim to be the country’s first blockchain enabled platform geared towards meeting the banking needs of MSMEs in the Philippines.
A lack of previous credit history creates a vicious cycle for SMEs. Loan applications with missing information are automatically rejected by formal institutions, which leads SMEs to again go back to informal sources of funding.
To solve this problem, the question that needs to be tackled is: how can underwriting of SME loans be simplified, given the lack of data on small businesses that have no history of transacting with formal institutions?
SME Finance Forum member Bank of the Philippine Islands (BPI) said it looks to raise P50 billion through a stock rights offering to finance expansion. According to the Manila Times, BPI said in a disclosure that the proceeds from the stock rights offer would finance a plan to accelerate lending activities across the consumer, small and medium enterprise, and micro- finance segments “to capture the positive momentum in the Philippine economy.”
