DAVAO CITY- Aside from being a way to bring the capital market closer and more accessible to micro, small and medium enterprises (MSMEs) the Securities and Exchange Commission (SEC) is looking at crowdfunding as a means to steer away the public from investing in ponzi schemes and other dubious investments.

“On the part of the investor this is an opportunity for you to look into or learn alternative investment channels other than going into scams,” says SEC director Meonee Felizmenio Jr. during the SEC Roadshow on Capital Market Formation for MSMEs and Start-ups held Feb. 15 at the Pinnacle Hotel in Davao City.

Felizmenio said these companies looking for crowdfunding investments are vetted by crowdfunding intermediaries or platforms.

“They make sure there are sufficient information about these businesses before you are invited to invest in it,” Felizmenio said

He said when one invests in Ponzi schemes the investors have little knowledge about the alleged company being invested in.

For investors in a crowdfunding platform, they can invest for as low as one thousand pesos

“So probably you are an investor and if you want to diversify then meron ka P10,000, you can look at the different businesses that are raising capital then invest separately,” Felizmenio said.

The SEC currently has three registered crowdfunding intermediaries.

He said through crowdfunding intermediaries MSMEs and Startups will have alternative sources of capital for their business.

“As a startup or MSME there are lots of challenges for them to be able to access bank financing because there are already regulations dito sa sa banko before they can lend you money because as a part of it the risk would be covered so they require collaterals and it could be more than the amount you are borrowing,” Felizmenio said.

“For the crowdfunding intermediaries for business as long as you are willing to impart information, disclose information you may qualify to be accepted for financing into these crowdfunding intermediaries,” Felizmenio said.

However, Felizmenio said they are not expecting the crowdfunding to substitute bank financing but rather “this would complement bank financing”.

He hopes MSMEs and startups would look at crowdfunding intermediaries as a viable investment platform. (PIA/RG Alama)