Global payments leader Visa (NYSE: V) has signed a memorandum of understanding (MOU) with the Philippine Guarantee Corporation (PhilGuarantee) to expand credit access and promote financial inclusion for micro, small, and medium enterprises (MSMEs), a sector long hampered by financing gaps.
According to a news release from Visa, the agreement will have Visa and PhilGuarantee explore credit guarantee schemes tailored for MSMEs, widen lending access through partner financial institutions, and provide capacity-building programs to help entrepreneurs embrace digitization.
The collaboration will leverage Visa Government Solutions, which offers disbursement programs, payment acceptance, and financial education. PhilGuarantee, an agency under the Department of Finance, provides credit guarantee systems for priority sectors, including MSMEs.
“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, Visa Country Manager for the Philippines.
Addressing MSME financing gaps
MSMEs account for more than 1.2 million businesses and 66% of total employment in the Philippines. Yet less than 10% of corporate loans go to the sector, leaving many struggling to stay afloat. A recent Visa study showed that 44% of MSMEs identify cash flow as their top challenge, with over half admitting their reserves could last less than six months.
Through this MOU, Visa and PhilGuarantee aim to unlock more financing opportunities for these businesses, bridging a gap that has long stifled growth and innovation in the sector.
The partnership aligns with the Visa Foundation’s $100-million small business accelerator initiative in Asia Pacific, designed to strengthen digital financial inclusion, boost job creation, and widen access to capital. The initiative complements Visa’s Practical Business Skills program, which provides training on cash flow management, digital payment integration, and financial planning.
By aligning government-backed guarantee systems with private-sector digital tools, both organizations hope to create an enabling environment where MSMEs can survive short-term financial pressures and build long-term competitiveness.