There are around 1.3 million sari-sari stores, or neighborhood mom-and-pop shops, in the Philippines, serving as the primary source of daily essentials for about 94% of Filipino consumers. Yet, services for their business growth are limited, leaving them unbanked and operating cash-in-hand.
Recognizing this challenge in the grassroots retail sector, Packworks, a Filipino startup offering a business-to-business (B2B) fast-moving consumer goods (FMCG) marketplace for sari-sari stores, and Cebuana Lhuillier’s Kanegosyo Center have teamed up to launch Sari Fund, an inventory financing service aimed at providing support to sari-sari stores nationwide.
Sari Fund empowers sari-sari store owners with the financial freedom to stock up on their inventory to boost the growth of their business. Through Packworks’ Sari.PH app, Kanegosyo Center will provide eligible users with an exclusive credit line that they can use to purchase inventory from partner megastores. To make the service affordable, eligible sari-sari store owners only pay a minimal transaction fee so they can focus on growing their business.
The unique inventory financing program comes as a crucial tool for small enterprises like sari-sari stores, which often face significant financial challenges, primarily due to limited access to traditional banking services and credit facilities.
With Sari Fund, micro-retail stores are able to stock inventory without the immediate burden of upfront costs, allowing them to maintain a robust array of items catering to the needs of their communities while also enabling them to grow and stabilize their businesses.
Leveraging technology to provide easy, simple, and affordable credit lines, the strategic partnership between Packworks and Cebuana Lhuillier’s Kanegosyo Center aims to overcome the traditional barriers in empowering the unbanked and underbanked sectors through the innovative inventory financing program.
“The dynamic alliance between Cebuana Lhuillier’s Kanegosyo Center and Packworks exemplifies a harmonious strategy in advancing financial inclusion for MSMEs. Through the fusion of technology, they dismantle conventional barriers, presenting groundbreaking and accessible micro-financing solutions to empower the unbanked and underbanked segments,” Cebuana Lhuillier President and CEO Jean Henri Lhuillier said.
“Sari Fund is more than just a financial solution but a beacon of hope for the heart and soul of our communities — the sari-sari stores. We believe that by unlocking their potential, we’re contributing to a more vibrant and resilient MSME (micro, small, and medium-sized enterprise) sector in the Philippines. Through this partnership, we are not only providing essential financial support but also fostering financial inclusion. This is a significant step towards a future where every sari-sari store owner has the opportunity to grow and succeed,” Packworks Co-Founder and Chief Executive Officer Bing Tan said.
Sari Fund comes timely as the MSME sector will need a much-needed boost for 2024 when high inflation is still expected, posing a challenge for small businesses. Analysts expect elevated inflation to affect the country’s economic performance this year with the onset of El Niño. According to a 2023 study conducted by Packworks, the country’s inflation can be felt worse in sari-sari stores, with food prices as high as 15% in these stores last year.
The Philippine Statistics Authority reported that nearly all businesses in the Philippines are categorized as MSMEs, making up 99.58% of the total.
