International Finance Corp. (IFC) is preparing what could become its first securitization deal in the Philippines backed by small and medium enterprise (SME) loans, as the World Bank Group’s (WBG) private-sector lending arm ramps up efforts to expand access to financing for underserved businesses in the country.

In disclosures over the weekend, IFC said it is considering an up to $110-million investment package for financial technology (fintech) company First Circle through a planned asset-backed security (ABS) transaction involving SME receivables in the Philippines.

This proposed investment is scheduled for IFC board approval on June 1.

Under the proposed structure, IFC will participate in the senior and mezzanine tranches of an off-balance-sheet securitization facility to be issued by a newly formed special purpose vehicle (SPV) here.

Securitization is a financing structure where loans or receivables are pooled together and converted into investment products that can be sold to investors, helping lenders free up capital and extend more credit.

IFC said the SPV will pool a diversified and collateralized portfolio of SME receivables originated by First Circle, a wholly owned subsidiary of Carabao Capital Philippines Pte. Ltd. (CCPH), which is, in turn, wholly owned by Singapore-based Carabao Capital Global Pte. Ltd. (CCG).

It added that the proposed financing package will include an IFC A loan of up to $20 million in the senior tranche, an IFC C loan of as much as $10 million in the mezzanine tranche, and an up to $80-million mobilization from local and institutional investors.

Commitments are expected to be executed in multiple tranches, with IFC initially participating in a first tranche of as much as $15 million across both senior and mezzanine portions.

“This investment would mark IFC’s first securitization in the Philippines’ market, contributing to the deepening and development of domestic capital and funding products,” it said.

IFC said the proposed facility is expected to run for up to four years, with annual roll-over options available during the first three years.

The investment aims to expand financing access for underserved micro, small, and medium enterprises (MSMEs), which account for more than 99 percent of businesses in the country and serve as major drivers of employment and economic activity.

According to IFC, proceeds from the proposed investment will be used for SME lending in sectors such as agriculture, healthcare, tourism, construction, and value-added manufacturing.

It said the project is expected to improve SMEs’ access to working capital, inventory financing, and growth investments while helping generate jobs in the country.

Also, IFC said the transaction could help deepen the Philippines’ still-nascent securitization market by encouraging nonbank financial companies (NBFCs) and fintech firms to adopt similar funding structures for underserved segments like SMEs.

“Securitization is still nascent in the Philippines,” IFC noted, adding that the proposed structure would help ease balance-sheet pressure on First Circle while enabling scalable long-term funding for SME lending.

It added that its participation is expected to demonstrate the viability of SME-backed securitizations and help mobilize institutional funding into the Philippine market.

First Circle’s parent firm, CCG, is majority-owned by its founders through FCHQ Holding Ltd. and IP Fortress. Other shareholders include IFC itself, Singapore-based Venturra vehicle Koru Ventures Fund I LP, and Southeast Asia-focused venture capital (VC) firm Insignia Ventures Partners.