SME LENDER CUTS INTEREST RATE, BOOSTS BUDGET BY P 2B
Digital business lender First Circle has slashed interest rate on its flagship loan product to as low as 1.39 percent a month while budgeting additional P2 billion for fresh lending activities before year-end to help small and medium enterprises (SMEs) recover from disruptions caused by the prolonged COVID-19 pandemic.
This is part of First Circle’s plan to provide business loans at a monthly interest rate of 0.99 percent by 2022—one of the cheapest noncollateralized financing that will be available to local SMEs. Before the latest rate reduction, the lowest loan rate of First Circle was about 1.74 percent a month.
The financial technology firm offers an alternative funding facility for SMEs especially at this time that traditional banks are being more cautious on their lending activities.
“We have seen first-hand the strength and resilience of business owners across the Philippines who have stared defeat in the face and come out stronger on the other side. and communities across the Philippines rely on these businesses for their livelihood and today, First Circle is taking a huge step to ensure SMEs can bounce back quickly,” First Circle chief executive officer Patrick Lynch said in a statement.
The P2 billion in fresh disbursement is also seen to fill the need for working capital during the Christmas season.
“Making it out of this recession is going to be a long game, and we know that. But the -ber months always present businesses with unique opportuniJanuary ties that just can’t wait. We are confident in our underwriting capabilities, so we don’t feel the need to be as conservative as other lenders,” said First Circle head of customer success Marcus Erlano.
“Our customers are smart business owners who have a very healthy mindset towards taking credit. They are constantly finding opportunities for growth despite less-thanideal conditions, so rather than standing back and letting them fend for themselves, we want to be there when they need us most,” he added.