The International Finance Corporation (IFC), the World Bank’s private sector arm, is planning to acquire an unspecified stake in Philippine financial technology firm First Circle for US$7 million to help boost lending to small and medium enterprises in the Southeast Asian country.
The investment in Singapore-registered Carabao Capital Global Pte Ltd., which operates in the Philippines as First Circle, is pending IFC board approval at a meeting scheduled for May 17.
It is aimed at supporting First Circle’s fundraising to scale up its operations and loan book in the Philippines, where SME credit penetration is among the lowest in Southeast Asia, the IFC says in a disclosure dated April 23 posted on its website.
“With data and technological edge as the cornerstone of First Circle’s strategy, the company is providing unsecured credit lines to SMEs with competitive rates, flexible repayment options, and the convenience of fast digital operations,” the IFC says.
It expects the equity infusion to “promote systemic changes in the SME finance market” and make lending to the sector more viable to traditional lenders.
Last month, the IFC also committed $7 million to another Philippine fintech, Salmon Group Ltd., as lead investor in the firm’s $25 million Series A fundraising. Salmon is a provider of short-term consumer credit.
