Crowdfunding generates P2.2 billion for MSMEs

MANILA, Philippines — Crowdfunding as an accessible and viable capital-raising option for micro, small and medium enterprises (MSMEs) in the country is gaining traction, generating over P2 billion in fresh funds for small businesses.

Securities and Exchange Commission chairperson Emilio Aquino said the SEC continues to see growing interest in the capital market among MSMEs, with a total of 361 companies tapping crowdfunding intermediaries for 1,212 projects as of end-2024.

The companies were also able to raise P2.24 billion in additional capital.

Aquino said there are also at least 358 crowdfunding issuer leads or those companies that have signified their interest to crowdfund.

Crowdfunding is a fundraising activity typically conducted by startups and SMEs, wherein the public can support or fund a business idea through an online platform.

There are three licensed crowdfunding intermediaries in the Philippines, namely SeedIn Technology Inc., Investree Philippines and Eastern Securities Development Corp.

Investree, the country’s first crowdfunding intermediary and funding platform, however, had earlier announced that it is ceasing operations.

Aquino last year said that the SEC remains optimistic on the crowdfunding industry despite recent setbacks and birth pains.

The SEC’s rules and regulations governing crowdfunding provides that SMEs no longer have to register securities with or secure approval directly from the SEC before they can solicit investments from the public.

They need only conduct their fundraising activity with a crowdfunding intermediary, funding portal or crowdfunding platform registered with the SEC.

“We continue to see increasing interest in the different capital market-based products and services among our MSMEs,” Aquino said.

“As overseer and regulator of the corporate sector and the capital market, we aim to create opportunities for businesses to realize their growth potential by availing themselves of the limitless benefits of turning to the capital market for their capital needs,” he said.

Aside from crowdfunding, Aquino said that the SEC is also monitoring 16 leads for public listing together with the Philippine Stock Exchange.

“Catering to the needs of the country’s MSMEs especially their access to capital has always been a priority of the Marcos administration. Aligning ourselves with this mandate of the government, the SEC sees the need for more financing instruments to be made available to our MSMEs who continue to face credit constraints,” he said.

The SEC yesterday concluded its two-year nationwide roadshow for MSMEs that commenced in February 2023 in Davao City.

The roadshow introduced the capital market as an accessible option for MSMEs to finance their operations and promote expansion through crowdfunding and initial public offering, among others.

A total of 21 key cities, including Baguio, Tarlac, Legazpi, Cebu, Iloilo, Bacolod, Tacloban, Cagayan de Oro and Zamboanga, were visited by commission through the roadshow, catering to over 3,000-onsite participant MSMEs and 60,000 online participants.