[In photo: (L-R) IFC Senior Investment Officer Aileen Zarate, IFC Country Manager for the Philippines Jean-Marc Arbogast, DTI Undersecretary Blesila Lantayona, First Circle CEO Patrick Lynch, First Circle Vice President Benedict Carandang]
The International Finance Corporation (IFC), the largest global development institution focused on the private sector in emerging markets and a member of the World Bank Group, recently invested USD7 million into First Circle, a pioneering technology company providing smart banking solutions to SMEs in the country.
IFC’s investment is geared towards the expansion of digital financial services for small and medium-sized enterprises (SMEs) in the Philippines.
IFC was joined by Endeavor Catalyst and Fasanara Capital, as well as existing investors Insignia Ventures Partners and Accion.Â
Since its inception in 2016, First Circle has funded over 3,000 unique customers, of which over two-thirds are SMEs accessing credit for the first time. First Circle’s innovative credit systems provide SMEs with higher credit limits, flexible repayment options, and the lowest unsecured pricing in the market. First Circle has recently expanded its services to include fee-free business banking and payment solutions.
IFC Country Manager for the Philippines Jean-Marc Arbogast explained, “Through this strategic investment, we aim to catalyze First Circle’s development of new products for which will help to foster better financial inclusion in the country.”
The fintech industry in the Philippines has witnessed significant growth in recent years. According to the 2023 Fintech Philippines report, the number of fintech companies rose from 115 in 2017 to close to 30,000 as of December 2022. Despite the industry’s growth, only a handful of companies focus on providing services specifically for MSMEs.
Lack of access to financial services continues to hold back smaller businesses, particularly in the Philippines where credit penetration stands at 2.2 percent of the country’s GDP as of 2023, trailing many regional neighbors.
“First Circle’s customers are growing trading, manufacturing, and services businesses who are the center of their own ecosystem of employees and trading partners, and all the livelihoods they support,” First Circle CEO Patrick Lynch said. “Our team is deeply motivated by our mission, our win-win customer relationships, and the multiplicative impact of our products. Our partnership with IFC is much more than just investment; it underlines our mission of economic empowerment and building for the long term.”
With SMEs achieving an average of 80% growth in their first two years as customers, First Circle’s funding is having the desired impact – demonstrating its vital role in driving SME success. IFC’s investment will unlock First Circle’s capacity to expand credit lines and deliver smarter banking solutions to the underserved SME market.
Since 2018, First Circle has also been an official partner of the Department of Trade and Industry (DTI), instrumental in advancing DTI’s mission to foster SME competitiveness and growth. Through its accessible financing solutions and financial literacy programs, First Circle has been instrumental in equipping SMEs with the resources they need to thrive, aligning with both DTI’s broader economic goals and IFC’s mission to empower this vital sector.
