Friday, April 19, 2024

WB Group’s IFC investing $7M in PH fintech firm Salmon

Fintech Holdings Ltd. — more popularly known as Salmon — has secured an up to $7-million (about P391-million) equity investment from the World Bank Group’s International Finance Corporation (IFC) to expand its data- and tech-driven consumer financial services in the Philippines.

A disclosure document over the weekend showed that the board of IFC, which lends to private firms, approved on Feb. 22 its forthcoming investment in Salmon.

For this investment to move forward, the next step will be to sign the deal with Salmon at a later date which the IFC has yet to disclose.

Founded in 2022, the shareholders of the Taguig City-headquartered Salmon include its founding management team made up of Raffy Montemayor, George Chesakov and Pavel Fedorov; Abu Dhabi’s sovereign wealth fund ADQ; as well as other local and global investors.

According to the IFC, its equity investment in Salmon formed part of “a fundraising round to enable the company to scale its business.”

To recall, Salmon announced last January that it obtained approval from the Bangko Sentral ng Pilipinas’ (BSP) Monetary Board to own a majority stake of 59.7 percent in the 61-year-old Rural Bank of Sta. Rosa (Laguna).

Back in January, Salmon said its controlling interest in Rural Bank of Sta. Rosa (Laguna) will allow the company “to offer AI-centric consumer credit and debit products nationwide” in a bid to “bolster access to modern banking services for millions of underserved Filipinos in key regions including Metro Manila, Cebu and Davao, where Salmon plans to open new branches, subject to BSP approval.”

“The IFC anticipates that the project will provide access to credit and deposit accounts to individuals underserved by incumbent financial institutions. The project will support Salmon’s efforts to grow its customer base, including by expanding and diversifying its customer acquisition channels, and also to support Salmon in expanding beyond its credit offerings and developing a deposit and transaction account product,” the multilateral lender said.

“The IFC also expects that the investment will promote competitiveness by demonstrating the scalability of a credit-first, data-centric specialized business model capable of expanding the scope of bankable customers in the consumer finance space. This is expected to drive incumbent financial institutions and other digital lenders to compete on product and process innovation,” it added.

As the IFC is among the top global investors in the fintech space across emerging markets like the Philippines, it will likewise help Salmon strengthen compliance to responsible lending policies.

Also, the IFC will back Salmon in its plan to introduce digital savings products as well as snag new licenses not only in the Philippines but also in other target markets overseas, according to the document.

At present, Salmon operates three subsidiaries in the Philippines that aim to “enhance financial inclusion by offering a wide range of credit and deposit products, which will include cash loans, revolving credit lines, point-of-sale financing, credit cards and debit cards,” the IFC noted.

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