Visa eyes launch of 2 new products to expand SMEs’ credit access

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According to a World Bank study, Philippine small and medium enterprises need $221 billion in formal credit, but only $15 billion is made available to them

MANILA, Philippines – Visa is launching two more offerings in the Philippines this year to expand credit access for small and medium businesses (SMBs).

The payments processing network said during a briefing on Tuesday, May 27, that they aim to launch these two products by the end of the year.

Jeffrey Navarro, Visa’s country manager for the Philippines, said they cannot divulge the specific institutions they are partnering with. But he said the two were “local, traditional banks.”

He added that these products aim at narrowing the funding gap for SMBs, which comprise over 99% of all Philippine businesses.

A World Bank study found that Philippine SMEs need $221 billion in formal credit, but only $15 billion is currently made available to them.

Navarro added that SMBs are supposed to comprise 8% of banks and financial institutions’ total loan portfolio. However, loans to SMBs only take up 4.52% of banks’ total portfolios.

“Some of the barriers that SMBs have are around those formal documentations, those collateral elements that we mentioned, security to have a loan,” he explained.

Without the needed documents, SMBs are left out of the formal banking system. This forces SMB owners to turn to informal lenders and their personal savings to fund their operations.

Gareth Parrington, Visa’s head of commercial money movement for Southeast Asia, also pointed out the rise of alternative lending providers in the banking system that are hoping to tap into the addressable market.

“And we’re seeing them basically look at very vertical solutions for SMBs. So by that, I mean marketplaces where SMBs may sell their goods and services,” he said.

In February, Visa partnered with digital bank CIMB Bank Philippines to offer a business debit card to SMBs by the third quarter of 2025. The card will also be linked to a high-yield savings account, as well as a revolving credit facility that SMB owners can use to grow their business.

The payment processing network also invested around $100 million over five years through the Visa Foundation to form a comprehensive strategy for SMEs in the Asia-Pacific region. – Rappler.com