The Philippines is home to a significant number of MSMEs that make up at least 99.6 percent of all the businesses operating in the country. Despite this huge number, MSMEs are not able to contribute immensely to the economic growth of the country because they often encounter bottlenecks during their business lifecycle, and one of these is to obtain funds for growth and working capital needs.
For MSMEs, traditional financing institutions like banks do not cater well to their businesses since they are often extremely selective about the ventures they lend to. Small businesses are then forced to look elsewhere for funds while their operations are in danger of being compromised. Without a doubt, there is a disconnect between the demand of fund seekers and the options provided by traditional financing.
Fortunately, there are alternatives ready for today's entrepreneurs. Crowdlending is a relatively new funding method that not only answers the needs of fund seekers but also provides opportunities for investors. To date, one of the biggest crowdlending platforms in the SEA region is SeedIn Technology. We had a chat with Edison Tsai, SeedIn Technology Partner and Executive Director, to further understand crowdlending and how it has made an impact in the startup scene.
Financial inclusion for all
“SeedIn Technology is a FinTech company that enables financial inclusion for SMEs and Investors. We cater to businesses looking for financing and investors interested in funding projects. In short, we serve both borrower (SMEs) and lender (Investors) markets,” Edison explained. In their 5 years of operation, the company has expanded to several countries across Southeast Asia, raised over US $2 billion in funding, and financed more than 500 companies, making it one of the biggest in the Southeast Asia region.
Unlike traditional financing from banks and lending institutions, SeedIn provides an alternative financing option for its borrowers. Through crowdlending, the process is made easier, quicker, and more transparent. Gone are the days when businesses and investors have to endure the long waiting time to get the funding and investment they need.
Through SeedIn Technology, SMEs are given a better financing option that not only benefits them, but also opens financial opportunities for individuals looking to grow their money. This promotes financial inclusion for both groups. According to Edison, “Alot of the focus is on helping these SMEs, but what many of these business financing platforms fail to recognize is the other side of the equation - helping investors to get better returns for their investments.”
Currently, people don’t get many choices when it comes to figuring ways to maximize the growth of their money through passive income. While it is true that there are options such as time deposits, stocks, mutual funds, and even cryptocurrencies, some require a high initial investment amount, the returns take time, is underwhelming or simply too volatile.
“SeedIn’s platform provides attractive returns and risk-managed investments,” Edison explained, “It’s borrower-guaranteed, secured, and the returns are higher than traditional finance investment vehicles. Our real differentiator is how we can help the investors to diversify their investment portfolio and mitigate their risks through a secured financing platform with guaranteed returns.”
Through SeedIn Technology’s platform, investment returns are timely and predictable. “There is no need to base your returns on money market performance, since an investor is lending it to an SME and getting guaranteed returns from the Fund Seeker,” Edison said, “We take out the surprises to ensure that risk averse investors can peace of mind knowing that each SME has undergone strict due diligence processes before we place the projects on our platform.”
With that, Seedin’s crowdlending platform acts as a bridge for investors and fund seekers wherein the investors become “The People’s Bank.” SeedIn enable individuals to fund projects of their choice, and in return, they get equal monthly repayments of principal and interest. It’s a win-win for both investors and fund seekers, and an actualized effort to promote financial inclusivity.
Keeping the trust
Credibility and trust go hand in hand for SeedIn Technology. They always ensure that their platform consistently delivers. “To maintain the trust of our SME clients, we ensure that they will always get the financing they need through our platform. And for our investors, we ensure to keep their trust through a strict selection of projects that gives guaranteeing returns. The trust really goes both ways,” Edison shared.
To provide a secure and trustworthy service, SeedIn Technology ensures to have all projects vetted on the platform. Edison shared, “Establishing trust is our reason for success. We have to do our due diligence very well. And from our past 5 years of cross-regional operations and working with hundreds of businesses from all industries, we think we have figured out the right formula. The knowledge base and best practices are embedded in our DNA.”
Making an impact
For the SMEs that SeedIn Technology help grow, Edison’s advice for them is to really know their market and understand the problem they are trying to solve. “They can either solve a 1-dollar problem for a million people or a 1-million dollar problem for one person. Whichever it is, the impact of their solution is going to make a difference,” he said.
Much like how Edison hopes that the businesses they help can bring that change, he also knows that SeedIn Technology can make a huge impact in today’s society. “After I worked for the National Agency where even our everyday work has an impact on the whole country, I returned to the private industry realizing that we have the potential to make similar impacts on a national scale,” Edison recalled, “Through bridging investors and SMEs together, I know we can have a huge social impact not just in the Philippines, but across Southeast Asia. I feel excited waking up every morning knowing we can make that kind of a difference.”
With a goal to promote financial advocacy and inclusion, SeedIn’s mission is to enable more businesses and individuals across SEA to have better financial options through its crowdlending platform. Edison said, “We hope that through our digital disruption, we can inspire other industry leaders and disruptors to join the movement and truly transform the financial landscape.”
For more information, you can check out SeedIn Technology’s website here.