Hong Kong, December 18, 2001—
The International Finance Corporation has signed agreements to invest US$20 million in specialty finance company, SMEloan (Asia), to help expand the company’s innovative business model beyond its current market in Hong Kong and southern China to the Asia-Pacific region.
Founded in August 1999 by Mr. Ming Siu and private equity firm Whitney & Co., SMEloan is an innovator in lending to the region’s small and medium enterprises and provides credit to businesses that have traditionally found it difficult to obtain working capital loans. The company leverages a proprietary Internet-based technology platform which allows it to originate and service loans to customers efficiently and effectively. Launched in Hong Kong in 1999, SMEloan plans to expand to other Asian markets in the coming months.
IFC’s investment will allow SMEloan to pursue two key objectives—to expand its small business lending, particularly in Asia’s emerging market countries; and to build its technology subsidiary, which will offer the company’s technology platform to financial institutions in the region.
Traditionally, high transaction costs, high risks, and collateral requirements have constrained the access of small businesses to bank lending. SMEloan’s model leverages technology and the Internet to create a scaleable risk management platform that institutionalizes the lending process and reduces costs associated with servicing small business loans. In emerging markets, where banks tend to be the primary providers of finance, it is expected that SMEloan’s technology will enable banks to increase their direct lending to small businesses by providing a new tool to address this marketplace.
Ming Siu, Chairman and CEO of SMEloan said, “IFC can add tremendous value to SMEloan’s development. This investment provides validation of our proprietary lending model and systems and we look forward to continuing our rapid growth with IFC as a close partner.”
Brian Doyle, Managing Director of Whitney & Co. and a founding director of SMEloan, commented, “This financing shows that sound companies, regardless of the market environment, can attract capital and continue their growth. IFC has extensive relationships in the global small business lending industry and we are fortunate to have their participation.”
Javed Hamid, IFC Director for East Asia and the Pacific, noted, “This project represents a strategic investment for IFC which recognizes the critical importance of the small and medium enterprises sector in developing countries. IFC looks forward to helping SMEloan extend its innovative approach to financing by assisting small businesses around the world.”
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
