First Circle gets P300-M credit facility from Cathay United Bank

FINANCIAL TECHNOLOGY (fintech) company First Circle Growth Finance Corp. has secured a P300-million sustainable finance credit facility from Taiwan’s Cathay United Bank (CUB) to support lending to small businesses.

The credit facility finalized last month will strengthen the fintech lender’s funding base to allow it to cater to small and medium enterprises’ (SME) growing demand for financing, it said in a statement. It will also support the company’s continued expansion.

“Cathay United’s financing enables First Circle to continue expanding access to credit to high quality SMEs who are left behind by the banking system. We look forward to expanding the relationship,” First Circle Vice-President of Finance Josh O’Donnell said in a press release on Monday.

The company said access to formal financing continues to be a challenge for SMEs, which is a gap it wants to help address. Micro, small, and medium enterprises account for more than 99% of Philippine businesses and contribute around 40% of the country’s economic output.

“Since launching operations, the company has focused on providing digital-first financing solutions designed to simplify and speed up business lending for entrepreneurs that may face challenges accessing traditional bank credit,” it said.

“Beyond working capital and business loans, First Circle has also been expanding financing solutions that support SMEs pursuing renewable energy adoption and sustainability initiatives, including its Solar Financing product designed to help businesses transition to clean energy through accessible and flexible funding options. The initiative aligns with the growing adoption of sustainable business practices among Philippine enterprises while helping SMEs manage long-term operational costs through renewable energy investments.”

Increased environmental, social, and governance (ESG) adoption among financial institutions have also led them to look for financing models that support inclusive economic growth, responsible lending, and long-term sustainability.

“Through the partnership, Cathay United Bank expands its participation in the Philippine market by supporting a fintech-focused SME lender with a growing nationwide presence… The transaction also highlights strengthening economic ties between Taiwan and the Philippines, particularly in areas involving financial services, digital innovation, and SME development,” First Circle said.

“Partnerships between regional banks and alternative lenders are expected to play an increasingly important role in improving capital access for underserved businesses while supporting broader economic development goals.” — A.M.C. Sy