Converge ICT Solutions Inc., the Philippines’ fastest expanding broadband operator, has partnered with the Securities and Exchange Commission (SEC) to encourage small enterprises and start-ups to use the capital market to meet their funding needs.
In the Baguio leg of the SEC’s roadshow on capital formation for micro, small, and medium enterprises (MSMEs) and start-ups, the SEC encouraged business owners to secure funding through capital market-based services such as public offering, crowdfunding, and private placements, among others.
Converge Vice President and Head of Investor Relations Owen Kieffer Ocampo inspired local entrepreneurs by sharing how Converge accelerated business growth by offering shares to the public, highlighting the boosts gained by the company when it braved the pandemic crisis and had its initial public offering (IPO) in October 2020.
“A lot of work goes into conducting the IPO but the long-term benefits definitely compensate for it. First, you will have access to lower cost of capital, and you will have the capability to accelerate growth with the funding generated in your IPO,” he said.
Converge raised P25.3 billion ($523 million) in one of the country’s largest recent IPOs at that time. Leveraging these funds, together with its other sources of capital, Converge was able to expand its infrastructure from around 3.5 million ports in 2020 to 8.7 million ports nationwide – currently the most extensive in the country. More significantly, Converge earned the name of being a nationwide company – extending its fiber backbone from Luzon to major islands in Visayas and Mindanao – through the major capital infusion provided by the IPO.
“In just two years from the IPO, we were able to expand our network nationwide to serve underserved and unserved areas in VisMin. We have also doubled our port count and we are now focused on utilizing these assets to serve the unserved and underserved,” Ocampo added.
Aside from connecting households, Converge has also been uplifting the MSME sector as part of its vision to empower the nation to be its best. Through Converge Business, the company enables small businesses through innovative connectivity products such as flexiBIZ; it empowers medium and large enterprises with value-added services such as Converge Workplace solutions like SweldoMo, and the Hotel Management software. For all sizes of businesses, Converge also offers device solutions, for better business productivity.
Meanwhile, SEC Market and Securities Regulation Director Vicente Graciano Felizmenio Jr. said there is an estimated $220 billion credit gap for MSMEs in the country, based on a report from the Asian Development Bank (ADB) and International Finance Corporation (IFC).
This was despite their substantial contributions to the economy, making up 99.5 % of local businesses, and accounting for 63% of the local workforce and 40% of the country’s gross domestic product (GDP).
“We want to show MSMEs and start-ups that there are other sources of financing that they could tap and it is the capital market. We want them to grow as a business so we present to them the options and they make the decision,” he said.
Through the Office for the Advancement of Strategic Investments in SMEs (OASIS), the regulatory commission promotes alternative financing options for small-scale enterprises and start-ups, helping them secure financing through the capital market.
For more information on Converge, visit www.convergeict.com .