Investors cautious  on SME financing

MANILA, Philippines — Investors are expected to be more cautious this year amid an expected global economic slowdown, but financing for small and medium enterprises (SMEs) will continue despite headwinds.

Investree Philippines, the country’s first crowdfunding intermediary and funding platform, remains optimistic on the financing outlook for the country this 2023.

Investree country manager Alexander Capulong said opportunities remain despite the predicted global recession and the still elevated inflation here and abroad.

“Investors will be more cautious this year. However, they are positioned to help SMEs grow their businesses and help investors find the right opportunities amid the economic headwinds,” Capulong said.

The global economy is headed to an economic slowdown this year after a sharp recovery from the pandemic. A global recession is also looming that could hit many countries.

This as inflation will remain a challenge and the consecutive huge rate hikes from central banks across the world will slowly hit economies.

On the domestic front, the economy is also expected to slow this year from a strong growth in 2022. Nonetheless, the economic team already dismissed the possibility of recession happening in the country.

Investree noted that the aggressive monetary policy tightening last year is posting additional challenges to startups and SMEs.

“But 2023 remains one of the best times to crowdfund in the Philippines. The current economic challenges prompt traditional sources of funding like banks or mature institutions to be more conservative,” Capulong said.

“Sometimes they can be portrayed as impediments but we can’t blame them. They have a duty to manage their risks especially for those handling public deposits,” he said.

As a crowdfunding platform, Investree aims to develop ways to help conservative players safely deploy capital to the market.

The firm is also encouraging lenders and borrowers to be confident in a sustainable crowdfunding business model that can withstand the current market condition.

Investree targets to make SMEs a viable opportunity, especially against other more traditional options like the stock, bond and crypto markets.

A joint venture between FDEV Digital Innovations and Ventures Inc. and Investree Singapore Pte Ltd., Investree Philippines was the first to secure a granted permanent license from the Securities and Exchange Commission.