FinTech Daily: First Circle Raises $1.3M for its SME Lending Service in The Philippines; Fintech Wor
First Circle Raises $1.3M for its SME Lending Service in The Philippines
First Circle, a fintech startup enabling SME lending in the Philippines, has raised $1.3 million. The capital was provided by Accion Venture Lab, which is attached to finance-focused non-profit Accion, and Deep Blue Ventures. First Circle raised $1.2 million last year, and it counts 500 Startups, IMJ, and Key Capital among its backers. SME lending is a given in most Western countries, but the challenges are more acute in emerging markets where there’s a lack of data on customers and banks tend to prioritize larger, more established clientele where the risk is perceived to be lower. Yet, SMEs represent a hugely important part of growing economies. In the Philippines, a Southeast Asia-based country with a population of nearly 100 million, SMEs represent 99 percent of all registered companies yet contribute to just 40 percent of economic output. Financing is a major issue, with SMEs accounting for less than 20 percent of all bank loans in the country. That’s where First Circle, which was founded in 2015, is aiming to make a difference by giving less established companies the footing to grow their businesses at a more rapid rate. “Lack of access to capital is a big problem that needs to be fixed. If it isn’t, millions of hardworking entrepreneurs and their businesses will not be given the chance to reach their potential,” First Circle co-founder and CEO Patrick Lynch said in a statement.
First Circle also made the processes more SME friendly, reducing the wait time, which can traditionally be as much as a month, to days and simplifying the paper trail involved. To date it has paid out over $5 million in loans. Lynch told in an interview that the company typically provides $10,000 with over a payback duration of three months. Loans are underwritten by a credit pool supplied by a mix of asset managers and family offices, who take more than half of all earnings from the loan book, Lynch said.
Treasury: Fintech Worth £7 Billion to Britain's Economy and Employs 60,000 People
Chancellor Philip Hammond said on Wednesday that the UK needs to strengthen its fintech sector in the wake of Brexit to help achieve the government's ambition for a "global Britain." Hammond was set to keynote the Treasury's first International Fintech conference on Wednesday, alongside Bank of England Governor Mark Carney. The International Fintech conference is part of fintech week and earlier this week Deloitte declared that London is the number one hub for fintech globally, alongside Singapore. The Chancellor said: "While we need to continue to attract the brightest and the best from around the world to these shores, we must also do better at nurturing and developing the home-grown talent to drive our economy forward in the future. Our vision of an outward-looking, Global Britain will deliver the high-skilled, high-wage economy of the future that will power the higher living standards we all want to see for future generations." Wednesday's conference, held in central London, aimed to drum up investment and expansion in the fintech sector. Representatives of over 100 businesses attended alongside a similar number of investors. The Treasury said ahead of the event that the UK's fintech sector — which includes everything from online lending to applying blockchain to capital markets — is now worth £7 billion to the UK economy and employs 60,000 people. Notable British fintech businesses include peer-to-peer lender Funding Circle and online international money transfer business TransferWise, both valued at over $1 billion. The CEOs of both will be speaking at Wednesday's conference. However, Hammond warned in Wednesday's speech that Britain cannot rest on its laurels. He said: "We can’t remain the number one place for FinTech and the other technologies of the fourth industrial revolution by simply relying on our ingenuity, talent and openness, we have to go out and get the business."
UK Research Council to Award £3.6 Million in Blockchain Grants
A UK-based research agency charged with distributing government grants has announced that £3.6m ($4.5m) will be made available to seven blockchain projects. Revealed yesterday, the Engineering and Physical Sciences Research Council (EPSRC) said the grants will range from £420,000 ($525,000) to £617,000 ($772,000). The funds will be issued under its "Digital Economy Theme", an effort aimed at supporting research around digital technologies that could have a positive impact on daily life. The EPSRC is the main funding agency for science and research initiatives in the UK, investing approximately £800m ($100m) annually for research and postgraduate training. According to EPSRC chief executive Philip Nelson, the decision to award the blockchain grants was made due to the apparent maturation of the industry beyond financial use cases. He said in a statement: "Distributed Ledger Technology may be synonymous with bitcoin to many, but as these projects show it has disruptive potential across a wide range of products and services. If it delivers on its radical promise, it could make a significant impact on the economy and society." Each of the seven EPSRC-funded projects will bring together universities and private-sector companies, with projects being led by professors from British colleges and universities. Receiving the most funding, at £617,000, will be an initiative focused on regulation and compliance models. The project is being led by Professor Tomaso Aste of University College London and will gain insight from blockchain consortium R3, as well as public institutions like the Cyprus Securities & Exchange Commission, the UK Financial Conduct Authority and the London School of Economics. The second most highly financed project seeks to develop trusted and transparent voting systems, using distributed ledger tech.