MANILA -The Securities and Exchange Commission’s (SEC) nationwide small business roadshow has arrived in Manila on Friday as the corporate regulator pitched alternative fundraising solutions to help address an estimated P12-trillion credit gap in the country.
About 1,300 entrepreneurs from micro small and medium-sized enterprises (MSME) participated in the event on Friday, which was held in the SEC’s headquarters in Makati City and also streamed online.
Similar to caravans previously held in Davao, Cebu, Cagayan De Oro, Zamboanga and Bacolod, the corporate watchdog underlined other fundraising methods for MSMEs including crowdfunding, which allows businesses to raise money from a pool of small investors via an online platform.
“In our continuous bid for financial inclusion, we recognize that there really is a need to broaden the financing instruments available for MSMEs,” SEC Commissioner Karlo S. Bello said during the event on Friday.
Fundraising needs of businesses in the country were massive at an estimated $220 billion, according to data from the International Finance Corp. Small businesses , however, are especially constrained in terms of financing options, as a study from the Asian Development Bank showed that only 4.8 percent of MSMEs borrowed from banks.
“Most of [small businesses] rely on internal resources for their capital needs. While those who apply for traditional bank loans face tedious documentation, high interest rates, and mandatory collateral requirements,” Bello said.
There are three registered crowdfunding firms in the country: Investree Philippines, SeedIn Technology, Inc., and Eastern Securities Development Corp. (Round One). The SEC said SeedIn alone disbursed P1.42 million in funding for nearly 300 projects at the end of 2022.
Philippine Stock Exchange president Ramon Monzon also joined the event on Friday and underscored the benefits of going public.
Monzon said small businesses have the option to list on the SME board or they could find a qualified sponsor to pursue their listing goals.
He encouraged firms to consider launching an initial public offering (IPO) even if market conditions were volatile.
“There is no right time there is no wrong time. When you have a good company and your company needs the capital, you do the IPO,” he said.
“My opinion on that matter is that the IPO price is not the be all end all. You do an IPO because you need capital and if you use that capital correctly the IPO price is history,” Monzon added.
Businessman Lester Yu’s Fruitas Holdings and Balai Ni Fruitas were among the successful listing stories that were highlighted during the event.
Fruitas chief financial officer Calvin Chua said listing was a strategic decision given their expansion goals to reach more households in the Philippines.
“For us, we wanted to ensure we have access to capital, particularly capital market access, that will help us fulfil our mission,” he said.
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