Fintech lender First Circle to expand, boost financial literacy nationwide

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Online lending firm First Circle is expanding its coverage to support small and medium-sized enterprises (SME) outside Metro Manila.

This follows news of the firm’s latest partnerships with the Department of Trade and Industry (DTI) and the Bangko Sentral ng Pilipinas, to provide P1.5 billion in loans to local businesses.

“We want to work with as many [SMEs] as we can,” Chief Commercial Officer Axel Regnström told SparkUp. As the nation’s first fintech-powered online lending firm, First Circle has leveraged its digital tools to streamline its services and expand rapidly. They are currently looking to work with prospective clients from CALABARZON, Cebu, and Mindanao.

“That’s the beauty of working with technology, because we’re not as limited as maybe as bank is with how many employees we have,” he added. “We can use the technology to process customers in a faster, [more efficient] way. That means we can work with more customers without having to at least drastically expand our operation.”

Through its services, clients can receive their loans within three to five days by simply uploading the necessary documents online through their mobile devices or computers. And Mr. Regnström says the firm plans to speed up processing times even further.

“We don’t really think that that’s good enough,” Mr. Regnström said. “We think that you should have money within 24 hours in your bank account and that’s really the ambition. If you have the purchase order, why can’t you have the money [right away]?”

Expanding its services

Through the P1.5 billion worth of available loan and an average loan size of P500,000, Regnström said that the number of businesses the initial credit line could cover around 1,500 clients but this is not completely set in stone.

Since publicly launching in 2016, First Circle claims to have serviced more than a thousand clients, lending about P1 billion, with no collateral needed. At an average loan size of P500,000, Regnström says their pool of P1.5 billion in available loans could cover another 1,500 businesses.

“We’re getting additional funding so we can expand that credit line further. While 1,500 customers is a good number, we want that to be in tens of thousands, hundreds [of thousands],” Mr. Regnström said.

As it continues to expand its client base, the company is looking beyond the Philippines and into other Southeast Asian markets such as those in Indonesia, Vietnam, Thailand, and Cambodia.

“There’s a lot of potential to expand our fintech products [out there],” Mr. Regnström said.

Financial literacy

In partnership with DTI, First Circle is looking to improve financial literacy among local firms, targeting those unfamiliar with modern financial products.

According to Trade Secretary Ramon M. Lopez, DTI plans to include First Circle speakers in seminars conducted across its 950 Negosyo centers nationwide. Mr. Lopez has also invited First Circle to participate in its SME Academy, launching on Oct. 27.

The academy, housed in the former Philippine Trade Training Center in Pasay City, will offer seminars covering various financial literacy modules and entrepreneurship courses.

“We’re a fintech [company], so we’re a bit new and the SME owners are a bit older on average,” Mr. Regnström said. “So we’re going to have to teach them to adopt a tech product. But once they adopt a tech product, and they see how powerful it is, how it can work for them, then [they’d be more open to use it].”