They may be tiny, but the 1.3m mom-and-pop stores in the country are an important sector that will benefit from digitalization.
In the Philippines, more than 270,000 neighborhood mom-and-pop shops — known locally as “sari-sari stores” — are under-banked and under-modernized to tap into the digital era.
The challenges stem from various factors: stringent requirements from traditional financial institutions often categorize many of these micro businesses as high-risk borrowers. Additionally, owners of many sari-sari stores lack knowledge of (and access to) available financial services.
One firm that provides such micro-businesses with access to secure, reliable, and affordable inventory financing services is 1Sari Financing Corporation (1Sari). By offering sari-sari stores the ability to tap into crucial financial resources, the firm helps these businesses survive and even thrive.
The firm has also partnered a startup that offers a business-to-business fast-moving consumer goods marketplace for sari-sari businesses: Packworks. Under the partnership, both firms will offer sari-sari stores a starting credit line amount of 2,500 pesos through 1Sari’s inventory financing product, which will be available as an in-app service for Packworks’ partner stores. Participating sari-sari stores can use the credit to purchase goods and bolster their inventory, ensuring they are well-stocked and ready for customer demands — especially during festive seasons.
There will also be a “prompt payment rebate scheme” to promote good paying habits for borrowers. Stores can get a rebate of as much as 75 pesos if they pay their dues on time and in full, which they can use for their next round of inventory financing.
According to 1Sari’s co-founder and Chief Finance and Risk Officer, Dindo Velasquez: “Collaborating with Packworks supercharges the expansion and funding of well-deserving, credit-worthy sari-sari stores.” Through the tech platform, Velasquez said, 1Sari can “gain the power to deliver inventory financing to previously underserved micro-enterprises” efficiently, to “enhance their financial prospects.”
Packworks’ co-founder and Chief Platform Officer Hubert Yap noted that the partnership is a step forward to tapping the immense potential of over 1.3m sari-sari stores in the country: “By reaching the unbanked and underbanked, we’re championing the entrepreneurial spirit that drives our nation forward.”
Packworks firm also runs a program to educate owners of sari-sari stores on micro-entrepreneurship.
