More micro, small, and medium enterprises (MSMEs) will use supply
chain financing (SCF) and this solution will cover 15 percent of the cost of
the entire volume of goods and services produced by the sector by next year, according
to  a forecast by an app offering financing
solutions for the underbanked.
UnaCash, an app offering bespoke financing solutions for the
underbanked, said in a statement Monday, March 20, citing steadily growing SCF
in the country. The statement also said that the International Finance Corp.
noted that the Philippines has over $20-billion available supply chain
financing (SCF) assets to be taken up by banks and NDTLs (non-bank lending
institutions that do not take deposits).
“Supply chain financing is steadily growing its presence in
the country as short-term loans have proven to be effective to support small
and medium scale businesses," said Joana Saplan-Mateo, the Head of Product
of UnaCash Supply Chain Financing.
"We cover operational expenses while making it as
accessible as possible to business owners, allocating proper channels to make
disbursement more efficient," she explained.
Through supply chain financing, business owners ensure that
operational expenses will be covered, despite surging inflation rate and the
effects of the pandemic.
Considering that the country's gross domestic product (GDP)
is about $394 billion, and MSME accounts for about 40 percent of this
indicator, SCF schemes are ready to take on about 13 percent of the annual MSME
production, UnaCash deduced.
The 15 percent level is "a very realistic benchmark for
SCF companies for the next year", given the high demand for the service
and the rapid growth in the local market.
The local MSME sector comprises at least 99.51 percent of
the country’s market.
Despite rising inflation, (8.7 percent as of January 2023),
the national gross domestic product (GDP) forecast of 6-7 percent shows that
the local market has a potential of leading economic growth in Asia-Pacific,
due to the pent-up demand caused by the COVID-19 restrictions.
Already, UnaCash has identified the top industries in the
local setting where SCF has penetrated since the fourth quarter of 2022 to date.
SCF is used in 29 percent of the retail sector; 12.95
percent in construction, and 8.93 percent in import and export trading.
UnaCash also sees great potential in introducing supply
chain financing in growing industries such as health and medical,
manufacturing, IT solutions, e-commerce, and agriculture.
"So far, we have a growing number of more than two
hundred applicants, with approved applications of P85.6 million and counting,”
Mateo concluded.