BaaS Fintech Netbank Partners Investree Philippines to Expand Digital SME Lending Services

Netbank and Investree have announced a new partnership in order to expand electronic SME lending in the Philippines.

Netbank, which is a banking as a service (BaaS) platform, and Investree, an SME lender from Indonesia, have confirmed that their partnership will focus on expanding loans to SMEs based in the Philippines.

As noted in a release shared with CI, this partnership allows Investree “to accelerate its growth and so serve more of the underserved SME market.”

As explained in the announcement, SME lending is “very underdeveloped” in the Philippines. SME loans “as a percentage of GDP is approximately 3%, compared to 37% in Thailand and other countries in the region,” the update revealed. As a result, SMEs “struggle to grow, slowing job creation and economic development,” the release noted while adding that unlocking the potential of SMEs would “allow them to rapidly expand their impact.”

As mentioned in the release:

“Investree and Netbank are collaborating to expand the loans to this critical sector. Providing account opening services will allow Investree clients to finance their trade receivables, giving them vital cash to accelerate their growth. This service is a good example of Netbank’s partnership based business model.”

Jaymar Mendoza, Head of Operations and Co-Founder of Netbank, noted that the SME lending market is a “huge” opportunity and they think that this partnership has the “capacity to expand rapidly.”

Kok-Chuan Lim, CEO at Investree Philippines, remarked:

“Netbank provides an important ‘banking-as-a-service’ to improve our service level for our clients. It allows us to further digitise our offerings and better manage credit risks for our investors. Investree is partnering with regional digital banks for channeling funds into MSMEs.”

This new partnership “illustrates the opportunities” that digital-focused lenders have in the Philippines, the announcement noted while pointing out that the market is “very technically savvy and willing to use electronic banking services.”

Jamar also noted that a partnership between a regulated banking institution and an alternative lender is “very powerful.” He further explained that banks “bring balance sheet management experience and processes, alternative lenders bring a deep understanding of their clients.”

As noted in the announcement, Netbank is the first BaaS platform in Southeast Asia. It offers banking services, on “a fully white-labeled basis,” so that Filipino Fintech firms “grow fast and reduce their costs, thus accelerating financial inclusion and innovation.” It provides “simple, creative, low-cost solutions so that fintechs can open accounts, offer loans, and manage payments.”

Investree Philippines is a Fintech-focused venture launched by the Gotianun-led Filinvest Development Corp. (FDC) and Investree Singapore that “received approval from the Philippines’ Securities and Exchange Commission (SEC) to operate the first licensed crowdfunding platform for SME Financing in the country.”

This is reportedly “the very first issuance to any company since the SEC released its implementing rules and regulations in 2019.” Investree Philippines aims “to address the largely underserved $200+ billion MSME credit gap in the Philippines by connecting SMEs with institutional investors through its marketplace platform.”

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