Philippine businesses require an estimated P12 trillion in credit to thrive, particularly smaller firms who face difficulty accessing traditional financing options. To bridge this funding gap, the Securities and Exchange Commission (SEC) is organizing a nationwide roadshow to promote alternative financial solutions. The fundraising needs of businesses, which are crucial to the Philippine economy, amount to an estimated $220 billion based on International Finance Corp. data. However, only 4.8% of micro, small, and medium-sized enterprises (MSMEs) borrowed from banks, according to a study by the Asian Development Bank. Karlo Bello, SEC commissioner, highlighted that small businesses often rely on internal resources for capital needs, while those who apply for bank loans face challenges such as tedious documentation, high interest rates, and collateral requirements.
SEC Roadshow
During the small business roadshow held at the SEC’s headquarters in Makati City with online streaming, around 1,300 entrepreneurs from MSMEs participated. The roadshow aimed to raise awareness about alternative funding methods like crowdfunding, where businesses can raise funds from small investors via an online platform. The SEC has already registered three crowdfunding firms in the Philippines: Investree Philippines, SeedIn Technology Inc., and Eastern Securities Development Corp. (Round One). SeedIn alone has disbursed P1.42 million in funding for nearly 300 projects by the end of 2022. Additionally, Philippine Stock Exchange President Ramon Monzon highlighted the benefits of going public, encouraging small businesses to consider launching an initial public offering (IPO), even in volatile market conditions.
Monzon emphasized that the right time to do an IPO is when a company needs capital, regardless of market conditions. He stated that the IPO price is not the most critical factor, but rather the effective utilization of capital raised through the IPO. Fruitas Holdings and Balai Ni Fruitas, owned by businessman Lester Yu, were highlighted as successful examples of IPO listings during the event. Fruitas Chief Financial Officer Calvin Chua expressed that listing was a strategic decision to support their expansion goals and increase market access.
INQ
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