First Circle, a leading provider of smart banking solutions for SMEs in the Philippines, has announced that it has secured a $7 million investment from the International Finance Corporation (IFC). IFC, the largest global development institution focused on the private sector in emerging markets and a member of the World Bank Group. The funding round also included participation from Endeavor Catalyst, Fasanara Capital, and existing investors Insignia Ventures Partners and Accion.
“We are thrilled to welcome IFC, the pre-eminent investor in emerging market financial services, as new shareholders at this terrific inflection point in our company’s expansion,” said Patrick Lynch, CEO of First Circle. “We are particularly excited by IFC’s deep technical expertise in helping fintech companies expand their services, allowing us to serve more SMEs in the country.”
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 & payment solutions.
“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, especially those accessing credit for the first time,” said Jean-Marc Arbogast, Country Manager for the Philippines at IFC. “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 limited availability of financial services remains a significant obstacle for smaller businesses, particularly in the Philippines. As of 2023, credit penetration in the country stood at a mere 2.2 percent of GDP, lagging many of its regional counterparts.
“First Circle’s customers are growing trading, manufacturing, and services businesses who are the center of their own ecosystem of employees & trading partners, and all the livelihoods they support,” continued Lynch. “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.”
The positive impact of First Circle’s funding is evident, with SMEs experiencing an average growth rate of 80% within their first two years of engagement. This demonstrates the company’s crucial role in driving SME success. IFC’s investment will enable First Circle to expand its credit lines and offer even more innovative banking solutions to the underserved SME market.
Since 2018, First Circle has been a strategic partner of the Department of Trade and Industry (DTI), actively supporting its mission to enhance SME competitiveness and growth. Through accessible financing and financial literacy programs, First Circle has played a pivotal role in equipping SMEs with the resources necessary for success, aligning with both DTI’s broader economic objectives and IFC’s mission to empower this vital sector.
“The Department of Trade and Industry recognizes First Circle’s significant contribution in providing accessible financing to SMEs, which has directly supported our initiatives to boost economic activity and empower local businesses. Their commitment to financial inclusion aligns with DTI’s vision for a more competitive and resilient SME sector,” said DTI Undersecretary Blesila Lantayona.