SEC: 67% of MSMEs are experiencing credit constraints
THE Securities and Exchange Commission (SEC) has called for financing options for micro, small and medium enterprises (MSMEs) as 67% of them are still experiencing credit constraints.
“Most of them rely on internal resources for their capital needs. While those who apply for traditional bank loans face tedious documentation, high interest rates, and mandatory collateral requirements,” SEC Chairperson Emilio B. Aquino said in a press release on Wednesday.
The regulator said the MSME network accounts for 99.5% of the total businesses in the Philippines. MSMEs also hire more than half or 63% of the local workforce, which constitutes 25% of the country’s total exports and contributes 40% to the country’s gross domestic product.
“In our bid for financial inclusion, we recognize that there really is a need to broaden the financing instruments available for MSMEs,” Mr. Aquino said.
In line with this, the SEC committed to rolling out roadshows that will present financing options like crowdfunding to MSMEs and startups.
Crowdfunding is a fundraising activity that allows startups and MSMEs to get funding from the public through an online platform.
Under SEC Memorandum Circular No. 14, Series of 2019 or the Rules and Regulations Governing Crowdfunding, MSMEs are no longer required to register securities before they can solicit investments from the public, provided that it will be conducted through a crowdfunding intermediary that is registered with the regulator.
At present, the SEC recognizes three registered crowdfunding intermediaries, which are Investree Philippines, SeedIn Technology, Inc., and Eastern Securities Development Corp.
On Wednesday, the SEC held its first roadshow at the Pinnacle Hotel in Davao City which was attended by companies, national government agencies and local government units.
The roadshow was led by the newly created SEC Office for the Advancement of Strategic Investments in SMEs (OASIS).
Mr. Aquino said that with the new programs and initiatives being introduced by the SEC, the commission is hopeful that the present 286 listed companies on the Philippine Stock Exchange will increase.
The SEC will be doing a monthly roadshow, targeting Cebu, Cagayan de Oro, Zamboanga, Bacolod, Legazpi, Iloilo, Tarlac, Baguio, the Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) region, and Metro Manila. — Justine Irish D. Tabile
