A Philippines-based alternative SME lender has landed new venture capital.
Reports Wednesday (April 12) said First Circle raised $1.3 million from Accion Venture Lab and Deep Blue Ventures, a round that adds to the $1.2 million First Circle raised last year. According to reports, the startup will look to fill in financing gaps for the nation’s small businesses that make up 99 percent of all registered companies — yet account for just 40 percent of economic output.
Part of the challenge in getting SMEs to be economically successful, reports said, is that they account for less than 20 percent of all the loans issued by banks in the Philippines.
“Lack of access to capital is a big problem that needs to be fixed,” said First Circle cofounder and CEO Patrick Lynch in a statement. “If it isn’t, millions of hardworking entrepreneurs and their businesses will not be given the chance to reach their potential.”
According to Lynch, First Circle will continue to focus on the Philippines market in the near future but may look into expanding into Indonesia, Thailand or other Southeast Asia markets. He added that the company will look to close a Series A round of funding before the end of the year.
Last month Accion International announced $141 million in funding raised alongside VC Quona Capital, which will be used to fuel FinTech startups across the globe that aim to disrupt the traditional banking market.