IFC, GrowSari raise funds for MSMEs

MANILA, Philippines — The private sector arm of the World Bank Group and e-commerce start-up GrowSari have teamed up to raise over $100 million to help transform micro, small, and medium enterprises (MSMEs) in the Philippines.

The International Finance Corp. (IFC) of the World Bank Group said it has partnered with GrowSari and other investors to raise funds for digital transformation of MSMEs in the Philippines.

This aims to increase access to the supply chain for informal retailers, especially women.

GrowSari is a tech-enabled business-to-business (B2B) platform that supports small physical retail stores such as sari-sari stores, carinderias, pharmacies, and other roadside and market shops with tools to manage and grow their business.

It offers services including telco loading and bills payment for local stores, while equipping MSMEs with credit to ease working capital constraints.

Investors were able to raise $77.5 million, bringing the total funding to around $110 million, the largest amount ever in the B2B and MSME space in the country and in the region.

The informal retail sector plays a key role in the country’s economy with MSMEs, accounting for 63 percent of employment.

However, IFC said that informal retailers face challenges due to inefficient and fragmented supply chains. It said that digital supply chain platforms can enhance efficiency and enable suppliers to expand, spurring adoption of digital platforms in the country.

IFC senior vice president for operations Stephanie von Friedeburg said the pandemic has changed how businesses work.

“Businesses that ignore digital technology put themselves at an immediate disadvantage. Our investment will enable GrowSari to expand digital adoption and financial services for MSMEs, which is critical to keep them competitive, and for a resilient and inclusive recovery,” she said.

GrowSari CEO and co-founder Reymund Rollan, for his part, said fresh fundings would help bring top global quality talent in operations, technology, and data science into the start-up ecosystem of the Philippines.

He said GrowSari plans to leverage funding to accelerate its national expansion.

From a base of 1,000 sari-sari stores in three cities in 2018, GrowSari has grown to service more than 100,000 stores in over 220 municipalities across Luzon.

IFC is also helping GrowSari develop an accurate credit scoring model, which will accelerate access to credit for stores, spur financial inclusion, and promote gender parity as more than 75 percent of its stores are female-owned.