Visa, a leader in digital payments, said it aims to expand support for Filipino small and medium enterprises (SMEs).
Despite their significant economic contributions, these businesses encounter substantial obstacles to financial inclusion and growth, Visa said. SMEs constitute over 99 percent of all business enterprises in the Philippines and generate 66 percent of total employment, yet they continue to face considerable challenges, particularly in accessing funding.
A recent Visa study highlights the significant difficulties SMEs face in obtaining capital, with these businesses receiving less than 10 percent of total corporate loans. Cash flow is a major concern for 44 percent of SMEs, and over half report having less than six months’ worth of reserves. Additional hurdles include the cost of devices and hardware for payment acceptance, as well as lengthy application processes for cardholders. Fraud prevention was also cited as a key concern by 33% of card-accepting businesses.
The financial landscape further complicates these challenges. The International Finance Corp. reports a $5.2 trillion global funding gap for SMEs annually, with East Asia and the Pacific accounting for the majority. The Philippines exemplifies this issue, with a $221 billion funding demand against a $15 billion supply.
