SEC roadshow hopes to link MSMEs to funders

SUPPORT TO MSMEs. Commissioner Karlo Bello of the Securities and Exchange Commission (SEC) on Friday (Oct. 13, 2023) said the agency is moving to different regions to bring services closer to the people by pushing forward the thrust towards financial inclusion. The SEC roadshow on capital formation for micro, small and medium enterprises and startups aims to link small businesses to possible funders that will allow former to grow. (PNA photo by Liza T. Agoot)

By Liza Agoot

BAGUIO CITY – Micro, small and medium enterprises (MSMEs) have options for business ventures and sources of capital through the Securities and Exchange Commission’s (SEC) crowdfunding system. 
    Vicente Graciano Felizmenio Jr., Markets and Securities Regulation Department director, said small businesses face numerous challenges such as credit constraints, use of formal credits, and lack of access to formal fund sources.
     “The law mandates us as a regulatory body but the law creating us also made us develop a capital market that allows us to assist the MSMEs,” he said during the SEC roadshow on capital formation and MSMEs and start-up businesses in a hotel here Friday.
    He said results of a 2020 SEC survey showed that 99.5 percent of businesses in the country are composed of MSMEs, which hire 63 percent of the local workforce, thus contributing at least 40 percent to the country’s gross domestic product. 
    “You are the savior of the economy. You contribute a lot even if you are also hard up in your finances,” he told about 140 MSME participants from different provinces in the Cordillera Administrative Region, as well as from Regions 1 (Ilocos Region), 2 (Cagayan Valley) and 3 (Central Luzon).
    Felizmenio said SEC’s crowd-funding system operates in such a way that MSMEs open themselves to their needs for funding and the intermediary will link them to possible funders that might get interested in what they do. 
    He explained that while MSME registration to the SEC is not a requirement to be assisted under the crowdfunding system, the funders will ask for profiles and other information. That is where the registration with the SEC will come in. 
     “Funders know that a small business has the potential to grow big because large corporations started small. They may help fund small or start-up businesses,” the official said. 

He shared the story of the grilled chicken food chain Mang Inasal, which was established by a small businessman from Negros but was bought by fastfood giant Jollibee Foods Corporation. 

 “The owner retained a portion of the stocks and he is now a business partner of one of the largest food chain companies. There are other stories like that, small but was given the chance to grow through funders for development and growth,” Felizmenio said. 

SEC has also amended the implementing rules and regulations of the Securities Regulation Code to include registered funding portals in the list of authorized registrars, provided they have applied and complied with the registration requirements.

Whereas only traditional financial intermediaries were previously authorized to act as registrars, an authorized registrar would no longer need crowdfunding intermediaries and funding portals to assist potential investors with their application as qualified buyers.

SEC-CAR regional director Regina May Cajucom, in a press conference on the sidelines of the roadshow, said there are about 500 MSMEs in the region that are registered with them as regular corporations while around 150 are registered as one-person corporation. 

She said SEC sees possible ventures in agriculture and farm training centers, especially with President Ferdinand R. Marcos Jr.’s thrust on food security. 

The officials hope that agriculture-focused MSMEs would look for potential investors to establish cold storage facilities that will help ensure food security.

The roadshow started in Davao in the first quarter of the year and has been to Cebu, Cagayan de Oro, Zamboanga, Bacolod, Iloilo, and Metro Manila. (PNA)