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SEC opens capital market for MSMEs, start-ups

ILOILO CITY (PIA) -- Micro, Small, and Medium Enterprises (MSMEs), even start-up companies can now expand businesses as the Securities and Exchange Commission (SEC) opens access to funding through the capital market.

The said capital market is where savings and investments are channeled between the suppliers and those in need like MSMEs and start-ups.

According to a United Nations Development Program (UNDP) report provided by SEC Commissioner Kelvin Lester Lee during his keynote speech, the Philippines MSME network accounts for 99.5 percent of the total businesses in the country. 

These enterprises collectively contribute to 40 percent of the national gross domestic product (GDP) and hire 63 percent of the local workforce in our country.

Despite their significant economic impact, 67 percent of MSMEs still encounter hurdles in obtaining financing and credit needs. 

“Most of them rely on internal sources for their capital needs or those that apply for traditional bank loans face relatively tedious documentation, high-interest rates, 

Micro, Small, and Medium Enterprises (MSMEs) contribute well to the economy as they provide employment to the local workforce. *(PIA photo)

and mandatory collateral requirements which can be a challenge,” Commissioner Lee noted. 

This event, according to Lee, is part of a monthly nationwide roadshow that the SEC is organizing to promote and raise awareness of the various ways that our MSMEs can access the capital market for their financial needs.

SEC Commissioner lawyer Kelvin Lester Lee delivers the keynote speech during the SEC Roadshow on Capital Formation in Iloilo City. *(PIA photo)

He emphasized that catering to the needs of the MSMEs is one of the top priorities of the Marcos administration.

Lee added that during the first State of the Nation Address (SONA) of the President, he highlighted the importance of providing different financing options for MSMEs especially since the business sectors are still recovering from the effects of the COVID-19.

SEC promotes crowdfunding as another option for MSMEs and start-ups to gain access to the capital market for their financial needs.

Crowdfunding is a viable alternative to traditional loans that uses the fundraising approach where an individual 

or group solicits money from the public through the Internet.

In the case of start-up or small businesses, crowdfunding allows them to raise the funds that they need in order to execute their business ideas or certain project that is affordable and allows retention of initial value and control of the business.

Three SEC-licensed crowdfunding intermediaries, namely Investree, Seed In, and Round One presented their platforms during the roadshow. 

Director Vicente Graciano Felizmenio, Jr (with mic) answers queries from entrepreneurs during the SEC Roadshow on Capital Formation in Iloilo City. *(PIA photo)

The Roadshow is an initiative led by the newly created SEC office for the Advancement of Strategic Investments in SMEs (OASIS), which aims to encourage SMEs to explore the capital market as means to acquire external financing.

OASIS seeks to promote the interests of SMEs by providing a dedicated helpdesk to assist MSMEs on SEC requirements, conduct promotional events and set up viable alternatives in raising capital by simplifying the capital-raising products, promoting and advocating for a whole of government approach in strengthening the country’s MSME network and encourage investment houses and other financial institutions to implement SME-friendly underwriting and advisory programs.

The initiative is also part of the commission’s 888@88 goal, which means that there should have been at least 888 companies that tapped the capital market by the time the SEC celebrates its 88th anniversary in 2024. (ED/PIA6)

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Elijshah Dalipe

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Region 6

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