Investree Joint Venture in the Philippines Gets Permit from Local Authorities

Investree Philippines, a joint venture between Filinvest Development Corp and Investree, has officially received approval to operate crowdfunding platform from the Philippine Securities and Exchange Commission (SEC). This news marks the first issuance of permits for companies in the Philippines since the SEC released new implementing rules and regulations in 2019.

Quote from Philippine Information Agency, a permit pocketed by Investree Philippines as an intermediary through crowdfunding and this funding portal is valid for one year and is required to comply with certain rules. Approaching one year, in the 11th month of operation, the SEC will consider extending the license.

Investree uses a Singapore legal entity, Investree Singapore Pte. Ltd., in the establishment of this joint venture.

Just like Investree Indonesia, Investree Philippines has ambitions to address a credit gap of more than $200 billion for SMEs that have difficulty accessing finance in the Philippines. To achieve this, by connecting SMEs and startups with institutional investors through crowdfunding marketplace.

“FDC is proud to be able to present the first official and licensed platform in the Philippines, and to contribute to the development of SMEs through Investree Philippines. [..] We believe that Investree can be the best solution for SMEs who want to rebuild and develop their businesses, as well as support the country's economic recovery and growth," said FDC President and CEO Josephine Gotianun-Yap in an official statement, Friday (15/1). ).

Investree Regional Co-Founder & CEO Adrian Gunadi added, "A strong FDC ecosystem, including EastWest Bank and its understanding of the local market will seamlessly connect lenders and SMEs. “In synergy with FDC, we now have a solid operating and business model to ensure optimal services in order to support the growth of SMEs in the Philippines region.”

In Southeast Asia, in general SMEs still have a greater financial need, even though they are considered businesses with microfinance needs. But it is too small to be served effectively by the general banking model. This is because SMEs are often faced with problems such as lack of collateral and credit history that banks usually need, thus creating a financial credit gap for this middle segment.

Especially in the Philippines, this segment is underserved. In fact, SMEs account for 35% of the country's GDP, employing more than 60% of the local workforce.

"With the support of FDC, Investree Philippines will leverage the power of technology and data to develop and use a qualified risk assessment model that will assist and accelerate the credit assessment process in banks and lending institutions in general," said f(dev) Managing Director Xavier Marzan. f(dev) is a subsidiary of FDC which is engaged in venture and innovation.

Investree Philippines is Investree's second expansion, after Thailand, which started in early 2019. In Thailand, Investree uses the eLoan brand and collaborates with local partners who understand the conditions on the ground.

Until November 2020, investree recorded a total loan facility of Rp.7,7 trillion and the value of disbursed loans of Rp.5,5 trillion. The average rate of return is 16,8% per year and the average TKB90 is 99%.

Those who are expanding outside Indonesia

Indonesia has become an easy place to brew a service until it is “finished”. When it is considered successful, it has a significant position here, it means that there is a definite guarantee that the service can be brought outside Indonesia, especially to Southeast Asia with more or less the same family, culture, and behavior.

Supported by sufficient capital, a handful of local startups are confident to out of the cage. Investree and FundCita are two companies that come from fintech lending. Most companies come from outside Indonesia, the majority from Singapore, then enter Indonesia by localizing the name brand-New.

The rest are still just plans, which may be delayed due to the Covid-19 pandemic. Beyond that, successful startup verticals have entered a number of countries in Southeast Asia, among them are Gojek, Ruangguru, Traveloka, Sociolla, PasarPolis, and Xendit.