Irish-founded First Circle raises $7m to fund growth

Company is working to expand services to SMEs in the Philippines

Irish-founded lending platform First Circle has raised $7 million (€6.4 million) in funding to help expand digital financial services for small and medium-sized enterprises in the Philippines.
Irish-founded lending platform First Circle has raised $7 million (€6.4 million) in funding to help expand digital financial services for small and medium-sized enterprises in the Philippines.

Irish-founded lending platform First Circle has raised $7 million (€6.4 million) in funding to help expand digital financial services for small and medium-sized enterprises in the Philippines.

The funding was raised from the International Finance Corporation (IFC), a global development institution focused on the private sector in emerging markets and a member of the World Bank Group, along with Endeavor Catalyst and Fasanara Capital, and existing investors Insignia Ventures Partners and Accion.

Focused primarily on the Philippines, First Circle uses technology to lend to small and medium-sized enterprises, using proprietary software and credit-scoring to increase access to financial services, and speed up the process.

First Circle was founded in 2016 and has funded more than 3,000 unique customers, of which over two-thirds are SMEs accessing credit for the first time.

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The new investment from IFC will give First Circle the capacity to expand credit lines and deliver smarter banking solutions to SMEs.

“We are proud to be a part of this funding round for First Circle and help the company expand its operations to support more Filipino businesses, especially those accessing credit for the first time,” said Jean-Marc Arbogast, Country manager for the Philippines at IFC.

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“Through this strategic investment, we aim to catalyse First Circle’s development of new products for which will help to foster better financial inclusion in the country.”

Chief executive of First Circle Patrick Lynch said the company was heading for profitability, and the investment from IFC as a “pre-eminent investor in emerging financial services” would bring more credibility and good governance to the table.

Mr Lynch said the plan was to widen the services offered to its customers and concentrate on growing in the Philippines for now.

First Circle is looking to address what it describes as the undersupply of short-term working capital and trade finance to SMEs in the Philippines, where credit penetration stands at 2.2 per cent of the country’s GDP as of 2023.

The company is currently in the pilot phase with a bank account and payments product, and providing salary advances to employees of SMEs to assist with upskilling and training.

“Consumer credit is expensive, but we are able to give it to them at about a quarter of the next closest [provider], the reason being that we see it as a service for the business, so for us it is not a profit focus,” he said.

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Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist