First Circle officials during a courtesy call to Finance Secretary Carlos Dominguez:(L-R) senior operations manager Ira Zamudio, VP for data TJ Palanca, Finance Secretary Dominguez, co-founder and CEO Patrick Lynch, chief investment officer Chris Burgess
Online small and medium enterprise (SME) lender First Circle has landed on Metlife and Visa’s “Inclusive Fintech 50,” a global cohort of startups driving inclusion and resilience for the financially underserved.
First Circle was the only fintech company from the Philippines to make it to the 2020 roster. It was cited as a startup that “builds resilience and unlocks economic opportunity for business-to-business SMEs in the Philippines.”
An independent panel of 35 experts from venture capital, technology, and financial services firms identified the most promising startups providing credit, insurance, savings, and other critical products to low-income households and businesses that are particularly vulnerable to financial shocks like the coronavirus (COVID-19) economic crisis.
“First Circle’s customers often have no credit data or fixed collateral and are excluded from the banking sector. Many have been forced to work with predatory lenders and approximately 40 percent are female-owned. With First Circle, these SMEs can secure finance in as little as one day through a digital and automated application process that delivers flexible loan terms tailored to their unique needs,” the citation said.
The Philippine fintech has built a proprietary database of more than 250,000 business records and $1.5 billion of supply chain data, enabling the company to extend credit to SMEs that have been unserved or underserved by the banking system.
The 2020 cohort will benefit from connections to leading investors, including the IF50 Investors Circle, as well as their peers from the 2019 cohort.
The 50 fintechs were selected from a pool of 403 eligible applicants operating in 111 countries based on four criteria: inclusiveness, innovation, scale potential, and traction. Together, these high-potential startups are seen to demonstrate the power of financial technology to improve the accessibility, affordability, and convenience of financial services in advanced and emerging markets.
“Innovation in financial services can provide much needed stability to vulnerable populations by leveraging technology to fill gaps and meet their unique needs,” Mark Pickens, senior director, Social Impact at Visa, said in a press statement. “Visa is proud to support fintech innovators helping low-income communities weather the current storm and, importantly, build resilience for the future.”
Brad Jones, CEO of Wave Money and one of the expert judges said: “The final 50 were selected based on strong product-market fit, the experience of their leadership teams, and their potential to scale and reach underserved populations.”
The judges also selected two fintechs to receive “Financial Resiliency” prizes of $25,000 based on their contribution to strengthening the ability of low-income households and businesses to withstand and recover from the pandemic. Those two companies are: reach52, which provides micro-insurance to families in Southeast Asia who live more than an hour away from healthcare facilities and have limited incomes; and, PesaKit, which helps mobile money agents in Kenya and Tanzania manage shifts in liquidity so they can better serve their customers who have limited access to basic financial services.
“The health and economic challenges created by COVID-19 placed households and businesses on shaky financial footing — especially those who were economically vulnerable before the pandemic,” said Evelyn Stark, who leads Financial Health at MetLife Foundation.
“Amid the uncertainty, these fintechs demonstrate how new models can improve financial resilience.”
Launched in 2019, Inclusive Fintech 50 seeks to identify and elevate “high-potential, early-stage, and innovative” fintech startups driving financial inclusion and resilience. The initiative is implemented by MIX, the global data resource for investors focused on inclusive finance.
Inclusive Fintech 50 was founded by MetLife Foundation and Visa, with support from Accion and IFC, and additional funding from BlackRock and Jersey Overseas Aid & Comic Relief.