The Securities and Exchange Commission (SEC) reported the successful start of its nationwide roadshow that seeks to bring the capital market closer and more accessible to micro, small and medium enterprises (MSMEs).
In a statement, the Commission said more than a hundred officials and executives of MSMEs gathered at the Pinnacle Hotel in Davao City on Feb. 15, 2023 for the start of the SEC Roadshow on Capital Market Formation for MSMEs and Start-ups.
Attendees included companies, national government agencies such as the Mindanao Development Authority and the Department of Trade and Industry 11, as well as local government units, including the Province of Cotabato.
The initiative is in line with the government’s thrust to provide different financing options for MSMEs, given their further potential to contribute to the Philippine economy.
The MSME network currently accounts for 99.5 percent of total businesses in the country. It hires 63 percent of the local workforce, constitutes 25 percent of the country’s total exports, and contributes around 40 percent to the national gross domestic product.
“However, 67 percent of our MSMEs are still experiencing credit constraints. Most of them rely on internal resources for their capital needs,” SEC Chairperson Emilio B. Aquino.
He noted that, “While those who apply for traditional bank loans face tedious documentation, high interest rates, and mandatory collateral requirements. Hence, in our bid for financial inclusion, we recognize that there really is a need to broaden the financing instruments available for MSMEs.”
The roadshow presented crowdfunding, among others, as an easy and accessible way for MSMEs and start-ups to raise funds for business expansion.
Crowdfunding is a fundraising activity typically conducted by start-ups and SMEs, where the public can support or fund a business idea through an online platform.
SEC Memorandum Circular No. 14, Series of 2019, or the Rules and Regulations Governing Crowdfunding, provides that SMEs no longer have to register securities with or secure approval directly from the SEC before they can solicit investments from the public. SMEs need only conduct their fundraising activity with a crowdfunding intermediary, funding portal, or crowdfunding platform registered with the SEC.
There are currently three registered crowdfunding intermediaries registered with the SEC, namely Investree Philippines, SeedIn Technology, Inc., and Eastern Securities Development Corporation (Round One).
As of December 2022, a total of 205 registered issuers have successfully raised capital through the platforms of Investree and SeedIn Technology. SeedIn Technology’s platform alone has seen a total of P1.34 billion raised to fund 259 projects during the same period.
Executives from Investree Philippines, SeedIn Technology, and Round One discussed the advantages of crowdfunding and how MSMEs and start-ups can avail of their services during the roadshow. MSMEs were then given an opportunity to consult with their officials during break-out sessions.
The Commission will be bringing its monthly roadshow to other areas in the country, including Cebu, Cagayan de Oro, Zamboanga, Bacolod, Legazpi, Iloilo, Tarlac, Baguio, the CALABARZON region, and Metro Manila for the rest of the year.