Franchising boosts growth of microlending venture
(The Philippine Star) - November 18, 2019 - 12:00am

MANILA, Philippines — When LT&G Credit Line, a micro-lending company based in Bicol saw that their company was becoming instrumental to more small-scale businesses for sustainance and growth, its CEO Marco Antonio Soliman immediately thought that they needed to expand not only outside Bicol but across the nation.

With the help of Francorp, LT&G Credit Line is making waves in the franchise industry because of its unique business concept- a credit line company offering just the right amount of interest for the company and the borrower to earn profit at the same time.

Established in 2013, the lending company has been the go-to of sari-sari stores, eateries (carenderias) and similar small businesses when funding or capital falls short and getting a loan from commercial banks is a hassle. Six year later, it became so successful that many potential investors are applying for its franchise.

The road to microlending

Profit from daily operations is what is keeping micro, small and medium enterprises, or MSMEs, running. Soliman knows this not only because he finished a business management course in college. He ran a motorcycle spare parts shop in his hometown for two years which, he believes serves as his “master’s degree”.

Using the money he earned from working for a telecommunications company and from a loan from his mother, he opened the shop which only ran for two years. “I couldn’t compete with big players in our area, so I had to close the shop eventually,” Soliman said.

Soliman then went to study law and sought career opportunity in two insurance companies. It was there that he was able to save up more money and build business connections at the same time. He was introduced to the sport of practical shooting which encouraged him to put up a gun store which he named Legazpi Trends and Gears or LT&G.

“The insurance company to which I am still connected with, offered me a loan which I used to put up my own building” Soliman said. “I grabbed the opportunity and this is where I transferred the gun store along with a small café, a security agency and a trucking business (established with several business partners) and the first LT&G micro-lending firm.

Seeing that his micro-lending business is doing good, Soliman consulted friends who are into the banking industry about another business to operate. A friend who is connected with Francorp brought up the idea of franchising for his gun store or café.  But instead, he thought of applying the franchise suggestion to the micro-lending company which is a unique business concept that can also be franchised.

“At the back of my mind, I was thinking who would be interested to franchise when a lot of big banks and informal lenders have already saturated the market.  My friends are discouraging me to pursue my idea of having it franchised, but I believe, given the right opportunity for the people to understand the benefits from the business and the science about it, many existing and would-be business owners will be interested,” Soliman said. 

Helping MSMEs grow

Aside from the micro-lending firm earning the right amount of profit and its franchise model being able to provide jobs, Soliman said he is glad that the business is growing alongside its MSME clients. “We actually consider them partners, we want them to succeed in their business. Our interest rate is very friendly. We know that if we charge more, they will not earn from their business” Soliman shared.

Majority of LT&G micro-lending clients are sari-sari stores and eateries followed by similar small businesses like repair shops, vulcanizing shops, water stations, among others. 

Our advantage is that we are offering a lower interest rate and we are a legal business compared to informal lenders,” Soliman said. Soliman said the company is continuously evolving to be proactive on the risks involving such kind of business model. Each branch gets evaluated regularly to check on the risk-management measures. “Lending can be the best or the worse business” he cautioned. “For us, we were able to study the science behind it. Qualifying the right borrowers is also a key factor” he said.

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