The Philippine National Bank (PNB) has entered into a loan facility agreement with Discovery Capital Finance Corp. (DCFC), a move aimed at expanding financing access for small and medium enterprises (SMEs) across the Philippines.
Under the agreement, PNB will provide DCFC with additional funding capacity, enabling the finance company to scale up its SME lending operations. The partnership combines PNB’s balance sheet strength with DCFC’s focus on serving smaller businesses, particularly those with limited collateral or shorter credit histories.
Access to capital remains a persistent challenge for many SMEs, especially outside major urban centers. By channeling bank funding through a specialized finance company, the two institutions aim to address gaps in traditional lending and reach underserved segments of the market.
DCFC President Diosdado Chua Salang Jr. said the partnership would allow the company to broaden its geographic reach and support businesses in regional economies. He added that collaboration with a large bank such as PNB helps accelerate the flow of capital to enterprises that often fall outside conventional banking criteria.
The facility will primarily support working capital loans, which SMEs typically use to finance inventory, meet contract requirements, acquire equipment, and manage cash flow. Improved access to such financing is expected to help smaller firms pursue expansion plans, potentially leading to higher output and job creation at the local level.
SMEs account for more than 99 percent of registered businesses in the Philippines but continue to receive a relatively small share of formal bank credit. Partnerships between banks and non-bank financial institutions have become an increasingly common strategy to address this imbalance, allowing banks to tap niche markets while leveraging the distribution networks and credit expertise of specialized lenders.
For DCFC, the facility provides a lower-cost source of funds, which could translate into more competitive loan pricing for borrowers. For PNB, the partnership reinforces its exposure to the SME sector without directly originating smaller, higher-touch loans.
The agreement reflects broader efforts within the financial sector to improve credit access for Filipino entrepreneurs and strengthen the role of SMEs in economic growth.