The International Finance Corp. (IFC), a member of the World Bank Group, invested $7 million in First Circle, a Philippine technology company that provides financial services to small and medium-sized enterprises (SMEs).
IFC’s investment will help First Circle expand its credit lines and offer more banking solutions to underserved SMEs. Other investors in the round included Endeavor Catalyst, Fasanara Capital, Insignia Ventures Partners, and Accion.
“We are thrilled to welcome IFC as a new shareholder at this important stage in our company’s growth,” said First Circle chief executive Patrick Lynch. “IFC’s deep technical expertise in helping fintech companies expand their services will allow us to serve more SMEs in the country.”
Since its launch in 2016, First Circle has funded more than 3,000 customers, two-thirds of which are SMEs accessing credit for the first time. The company offers higher credit limits, flexible repayment options, and lower unsecured interest rates than traditional lenders.
“We are proud to be a part of this funding round for First Circle and help the company expand its operations to support more Filipino businesses,” said Jean-Marc Arbogast, IFC’s country manager for the Philippines. “Through this strategic investment, we aim to catalyze First Circle’s development of new products that will help to foster better financial inclusion in the country.”
The fintech industry in the Philippines has grown significantly in recent years. According to the 2023 Fintech Philippines report, the number of fintech companies rose from 115 in 2017 to nearly 30,000 as of December 2022. However, only a handful of companies focus on providing services specifically for MSMEs. Access to finance remains a key challenge for smaller businesses.
Credit penetration for SMEs in the Philippines stood at 2.2 percent of the gross domestic product as of 2023, lagging behind many regional neighbors.
“First Circle’s customers are growing trading, manufacturing, and services businesses that are the center of their own ecosystem of employees and trading partners,” Lynch said. “Our partnership with IFC underlines our mission of economic empowerment and building for the long term.”
With SMEs achieving an average of 80 percent 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.
