ProCredit Secures US$4.1 Million in Funding to Boost Local SME Lending

ProCredit Secures US$4.1 Million in Funding to Boost Local SME Lending

by February 26, 2024

ProCredit, a fintech enterprise specialising in loans for small and medium-sized enterprises (SMEs), has successfully raised US$4.1 million in a pre-seed funding round. This round was led by Integra Partners and saw contributions from the Menardo Jimenez Family Office, M Venture Partners (MVP), Cento Ventures, Gobi Partners through the Gobi-Core Philippine Fund, along with several local angel investors.

ProCredit, based in the Philippines, is notable for its focus on technology-enabled SME lending, founded by a team with a collective experience of over fifty years in SME lending within emerging markets. The founders, who have previously held senior roles at Citigroup, Standard Chartered, ANZ, and the Asian Development Bank, intend for ProCredit to emerge as a leading SME lender in the Philippines.

The firm employs a unique methodology that integrates a credit-first client engagement strategy, rules-based underwriting, and a portfolio management framework alongside flexible product offerings that include risk-based pricing. These are supported by a bespoke technology platform aimed at reducing operational costs and enhancing the customer experience significantly.

With this new capital, ProCredit plans to expand its loan portfolio through both organic growth and strategic acquisitions while seeking additional funds. The company is also exploring potential expansions into the banking sector, leveraging the founders’ extensive experience in managing lending operations within regulated banks across various regions including Asia, Africa, and the US. Such an expansion would enable ProCredit to broaden its suite of lending solutions to better serve mid-market SMEs.

Chris Kaptein, Managing Partner at Integra Partners

Chris Kaptein

Chris Kaptein, Managing Partner at Integra Partners, expressed optimism regarding the investment, citing the founding team’s extensive experience and the significant market opportunity that lies ahead.

“ProCredit will play a significant role in providing improved access to credit to the economy’s most important sector. We are confident that our investment in ProCredit will further Integra’s mission of investing where profits and purpose converge for a win-win for all parties,”

commented Chris Kaptein, Managing Partner at Integra Partners.

Joel Jimenez, from the Menardo Jimenez Family Office, noted the distinct lending gap in the SME segment, acknowledging ProCredit’s strategic position to serve as a financial services partner of choice for SMEs, in contrast to entities focusing on consumer lending and deposit acquisition.

Mayank Parekh

Mayank Parekh

Meanwhile Mayank Parekh, Founding Partner at M Venture Partners, pointed out the imbalance in the Philippine lending market, where a large portion of formal loans favour large corporations, leaving about 15 million SMEs and their workers with scant access to traditional financial services.

“8 in 10 formal loans are channeled to large corporations in the Philippines, leaving 15 million SMEs and workers with little access to traditional finance. MVP is proud to support Adnan and the ProCredit Team in their mission to unlock financing for underserved SMEs. We were impressed with the quality of the team, focused business model, and proprietary underwriting technology to drive financial inclusion,”

he commented.

This funding represents a milestone for ProCredit in its effort to improve access to credit for SMEs in the Philippines, signalling a potentially transformative impact on a sector essential to the nation’s economic health.