Visa, a digital payments company, has signed a memorandum of understanding with the Philippine Guarantee Corp. (PhilGuarantee) to improve credit access and promote financial inclusion for micro, small, and medium enterprises (MSMEs).
The agreement will allow Visa and PhilGuarantee to explore credit guarantee schemes for MSMEs, work with partner banks to expand lending, and support business digitization through capacity-building programs. The partnership will use Visa Government Solutions, which offers services such as disbursement programs, payment acceptance, and financial education, to help MSMEs streamline operations and broaden financial access.
PhilGuarantee, an agency under the Department of Finance, provides guarantee systems to help key sectors access funding.
“Our collaboration with PhilGuarantee reiterates our support to the government’s vision to expand financial inclusion, supporting our MSMEs’ contribution to overall economic growth, and they deserve to have access to financial products and solutions that are responsive to their needs,” said Jeffrey Navarro, country manager for the Philippines, Visa.
MSMEs make up more than 1.2 million businesses and account for over 66% of total employment in the country. Despite their role in the economy, many MSMEs face difficulties in securing financing. A recent Visa study found that 44% of MSMEs consider cash flow their main challenge, with more than half saying their reserves would last less than six months. Less than 10 percent of corporate loans went to MSMEs, reflecting the funding gap many owners face.
Visa has also introduced initiatives to support small businesses across Asia Pacific. The Visa Foundation launched a $100-million small business accelerator program to promote digital financial inclusion, job creation, and access to capital for SMEs in the region. The company also runs the Practical Business Skills program, which provides training on cash flow management, digital payments, and financial planning.