The International Finance Corporation is proposing an investment of up to $110 million in a securitisation facility backed by SME receivables originated by Philippine fintech lender First Circle, marking what could become IFC’s first securitisation transaction in the country.
The proposed financing package includes up to $30 million from IFC’s own account, comprising as much as $20 million in senior notes and $10 million in mezzanine notes, alongside up to $80 million expected to be mobilised from B-loan and parallel lenders.
The facility will be issued through a newly established special purpose vehicle in the Philippines that will acquire and pool a diversified portfolio of SME receivables originated and serviced by First Circle, a wholly owned subsidiary of Singapore-incorporated Carabao Capital Global.
“The most significant expected project-level outcome is increased access to finance for SMEs,” IFC said, adding that the facility would support sectors including agriculture, healthcare, tourism, construction, and value-added manufacturing.
IFC said the securitisation structure would provide longer-term, tailored capital for productive uses such as working capital, inventory, and growth investments.
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The proposed facility is expected to run for up to four years with annual rollover options during the first three years, subject to legal and regulatory due diligence.
Securitisation remains relatively underdeveloped in the Philippines compared with more mature credit markets, limiting the use of asset-backed structures as a funding tool for non-bank lenders and fintech firms.
IFC said the transaction would help deepen the country’s nascent securitisation market while creating a new funding channel for lenders serving underserved borrowers.
By transferring receivables into a bankruptcy-remote vehicle, the structure is intended to improve investor confidence by providing exposure to a collateralised asset pool with an enhanced credit profile.
The deal could also encourage greater participation from institutional investors and demonstrate the viability of SME-backed securities in the Philippine market.
Commitments are expected to be executed in multiple tranches, with IFC participating in an initial tranche of up to $15 million across senior and mezzanine notes.
First Circle’s shareholders include IFC, Insignia Ventures Partners, and Koru Ventures Fund I, a Singapore-based vehicle linked to Venturra.
Development finance institutions globally are increasingly using structured finance vehicles to mobilise private capital into underserved SME lending markets.