Irish bachelor hopes to change Philippines lending sector

Patrick Lynch

Patrick Lynch, a 28-year-old investment banker from Dublin, hopes to expand the reach of financial technology company First Circle to more areas in the Philippines, after lending “millions of dollars” to small- and medium-scale businesses using a mobile app over the past two years.

Lynch, who previously worked for CompareAsia Group and Morgan Stanley in Hong Kong, established First Circle as CEO in Fort Bonifacio, Taguig City in March 2015 to take advantage of the rising opportunities in the country's finance sector. His co-founder is Tony Ennis who serves as chief technology officer.

“What we are is a very strong friend and partner of small and medium-sized businesses.  And we are gonna be the ones to make them big businesses,” he says.

From a two-bed apartment, the operations of First Circle moved to a premium office space at Trade & Financial Tower in Taguig City where it now has 60 people, including European professionals who help the company achieve its goal empowering SMEs in growth markets with financial services.

“Since our public launch in 2016, we have loaned millions of dollars and served hundreds of small and medium enterprises from various industries, enabling them to grow their business without worrying about lack of working capital,” the startup says.

First Circle offers two loan products to SMEs—purchase order financing and invoice financing. First Circle teams up with banks and is supported by venture capital firms Deep Blue Ventures, 500 Startups, Spiral Ventures, Key Capital and Accion.

It is recognized by the Securities and Exchange Commission (SEC) which regulates lending companies in the Philippines.

Lynch, who obtained a Bachelor of Arts degree in Business and Economics from Trinity College in Dublin in 2012, says First Circle uses technology to create a credit meritocracy for businesses in the growth markets of Southeast Asia.

“We believe that underserved great businesses will thrive if provided the right resources and opportunity. We are building a seamless user experience and using data analytics to generate true risk pricing to provide business owners with this opportunity,” he says.

First Circle lends anywhere from P3.5 million to P10 million to SMEs that need capital for expansion. Lynch believes that SMEs should be given a chance to borrow capital despite the lack of collateral.

“At First Circle, we believe that strong businesses should have access to financial services based on their merit and not limited to their collateral or relationships,” the startup says.

Lynch says business financing does not have to be complicated, and it takes only five minutes to register with First Circle app. Applying the KYC rules and credit information gathered from bank associations, First Circle makes a lending decision quickly, with money going to borrowers' bank account in five days or less.

First Circle accepts invoices or purchase orders as documents to decide on loans. Interest rate is only 2 percent for a three- to four-month loan.

Among First Circle's clients are medical supplies distributors, homeware distributors, supply chain providers coconut shell dealers and electronics distributors. Loans allow these SMEs to meet the orders of their customers.

Trade Secretary Ramon Lopez Department was quoted as saying that “First Circle is something that will really make a big difference to help the small and medium enterprises in the Philippines.”

Lynch is among Forbes magazine's “30 Under 30 Asia 2018” list of 300 young entrepreneurs and innovators.

“With the aim of providing finance to small to medium enterprises (SMEs) who find it difficult to secure capital, First Circle uses available information such as social media, credit, network and cell-phone data to create credit scores to determine the feasibility of a loan,” Forbes says.

Five Filipinos also made it to the prestigious list, including Stephanie Sy, founder of data science startup Thinking Machines; pastry chef Miko Aspiras; 19-year-old video blogger Bretman Sacayanan; and Carlo Delantar, country director of non-profit group Waves for Water; and artist Archie Oclos.

Lynch hopes to expand to other ASEAN countries, particularly Thailand and Indonesia.

“If we're right we're creating a the market size in excess of US$50 billion by empowering hundreds of thousands of business owners,” he says.

18 April 2018


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