Three in four Filipino MSMEs unable to secure adequate funding
Micro, small and medium-sized enterprises make up more than 99% of businesses in the Philippines and employ around 62% of the workforce, however these essential businesses experience significant barriers to growth when it comes to accessing business funding.report, surveyed over 1,000 MSME owners globally, including Filipino SME owners, who set up their company and applied for a business loan in the last five years.
The survey found that three in four of micro, small and medium-sized enterprises surveyed have been unable to secure sufficient, or any, funding on at least one or more occasion over the last five years. Of these businesses unable to secure sufficient funding, 48% went on to experience cash flow issues, 48% were unable to launch new products or services and 35% struggled to pay back creditors.
While Filipino banks and financial institutions were previously required to set aside a minimum of 8% of their loanable funds for micro and small enterprises , this law lapsed in 2018, and the most recent estimates show that current bank loan funds allocated to MSMEs is well under this threshold at around 5.
In order for the Filipino economy to recover from the impact of the pandemic, it is vital that banks and lenders embrace these new technologies that can dramatically improve the lending experience for MSMEs. Mambu’s survey also identified that the length of time it takes to apply for a loan is a major influence on businesses when choosing a lender, so there is also a clear business case for financial service providers to transition to a more digital approach.
Download Mambu’s ‘Small businesses, big growth’ report to learn their pain points when it comes to lending though this link:
المملكة العربية السعودية أحدث الأخبار, المملكة العربية السعودية عناوين
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