New firm to match foreign investors and local SMEs

Amalgamated Investment Bancorporation (AIB) has established a subsidiary that will draw foreign capital into the country’s small- and medium enterprises (SMEs).

"It is another investment banking activity, and the first of its kind backed by a major investment house," Stanley L. Saguinsin, AIB assistant vice president told The STAR.

The wholly-owned subsidiary is called Cashrounds.com which will act as conduit or middleman between foreign investors and the country’s SMEs.

Cashrounds.com was conceptualized and developed recognizing the Internet’s potential to improve the search for equity capital, whether through venture capital funds, investment houses, or high net worth individuals. Cashrounds.com also caters to investors, who are assisted in finding qualified private placement proposals.

The SMEs employ nearly 80 percent of the country’s workforce while accounting for the major portion of the gross national product. However, lack of capital or the difficulties of getting funds particularly from banking institutions has been crippling the industry.

Saguinsin, who is also general manager of Cashrounds.com, pointed out that SMEs prefer equity funds over loans from banks which charge high interest rates. On the other hand, foreign and local investors are willing to put up equity for reasonable returns.

Garage.com of the United States which was established under the same concept as Cashrounds.com registered investments of up to $100 million in a single year. "And that was limited to investments in the information technology (IT) sector," the AIB executive said. Another example is growasia.com based in Singapore.

The AIB will not only cater to the IT sector but to any local business sector that is looking for equity.

The procedure is for an interested investors or SME to apply for the right to register in the website of Cashrounds.com for a minimal fee. When accepted, they can access the list of either investors or businesses looking for a "match."

Saguinsin said AIB would screen all applicants to ensure reliability of both parties. "We will undertake due diligence on all applicants to safeguard from unwanted elements including money laundering. We will likewise implement several security measures in the site for the protection of the members."