Small and medium scale enterprises have constantly been the fastest growing and most innovative types of businesses in the Philippines and the ASEAN region. But out of over 70 million SMEs, only about 10% have regular access to formal financing resources. The rest have to contend with less formal means of financing, such as borrowing from family, friends and even unscrupulous entities just to satisfy their working capital needs.
This is also partially due to the existing stringent loan policies practiced by most local prestigious financial institutions who prioritize minimizing risk rather than assisting these SMEs to grow and progress.
Because of this, Acudeen Technologies, Inc. was founded on 2016 with the aim of helping SMEs boost their cash flows and capital requirements in a timely manner by providing invoice discounting services via digital platforms.
A baby in the financial industry, this Fin Tech firm was able to seal a $6 million (P300 million) financing deal with Rizal Microbank, a unit of Philippine-listed Rizal Commercial Banking Corp (RCBC). Rizal Microbank president Bong Roxas and Acudeen CEO Magellan Fetalino III both believe that the money will finance the invoices and receivables to the startup’s network of small and medium enterprises (SMEs), as well as Micro-SMEs (MSMEs) in the Philippines.
Fetalino said, “Our platform allows for fast transactions from receivables uploaded cash within five minutes to seven days, giving MSMEs better control of their cash flow. Currently, we have about 200 SME clients and I am confident about having more than 2,000 before the year ends.” Roxas added, “The biggest problem of MSMEs in the country, who are mostly unbanked and underserved by banks, is how to access affordable credit. With this partnership, we’ll be able to reach out to more MSME business operators. It is really aligned with our enhanced business model.”
“SMEs are the main fuel of our economy, contributing to about 40 per cent of our GDP. And yet the business environment in our country is not designed for them to grow,” Fetalino said, noting Acudeen has started reaching out to SMEs in emerging cities to educate them about financial inclusion.