In a move expected to unlock wider credit access for small and medium enterprises (SMEs) across the country, Discovery Capital Finance Corporation (DCFC) has recently entered into a strategic partnership with Philippine Guarantee Corporation (PHILGUARANTEE).
The collaboration positions DCFC — one of the fastest-growing financing companies in the country — to scale its lending operations by leveraging PHILGUARANTEE’s sovereign guarantee programs. The state-owned agency is mandated to share credit risk with lenders to encourage financing for micro, small, and medium enterprises (MSMEs), long regarded as the backbone of the Philippine economy.
Strengthening SME lending through risk sharing
At the heart of the agreement is PHILGUARANTEE’s credit risk-sharing facility, which provides guarantees on loans extended by DCFC. This mechanism reduces lender risk, particularly in segments with limited financial documentation — a common barrier for SMEs seeking formal financing.
DCFC President and CEO Diosdado C. Salang, Jr. said the partnership marks a significant shift in how the company can serve growing enterprises.
“This is a transformational partnership for us and, more importantly, for the Filipino entrepreneur,” Salang said. “With PHILGUARANTEE covering a portion of the outstanding principal, our credit exposure decreases. This allows us to lower our cost of funding and offer more competitive loan terms to a broader SME market.”
Wider access, better rates, faster growth
DCFC, which maintains a strong presence in provincial areas, expects the partnership to deliver three major benefits to SMEs:
1. Broader Access to Capital
With reduced credit risk, DCFC is now positioned to expand lending to sectors and businesses that may have previously been considered too risky. This opens the door for more micro-entrepreneurs, small retailers, service providers, and growing mid-sized companies to secure working capital and expansion loans.
2. More Competitive Loan Terms
By lowering the cost of funds, the guarantee program allows DCFC to offer SME loans with improved rates and more manageable repayment terms — an advantage for businesses navigating tight cash flow and rising operational costs.
3. Boost to Local and Regional Economies
The increased availability of financing, especially outside Metro Manila, supports broader national development goals. Faster access to capital enables enterprises to expand, generate employment, and stimulate economic activity in regional centers across Luzon, Visayas, and Mindanao.
A push toward greater financial inclusion
Executives of Discovery Capital Finance Corporation and PHILGUARANTEE during the MOA-signing aimed at expanding SME financing nationwide
For both organizations, the partnership represents a shared commitment to deepening financial inclusion in a country where SME financing remains a persistent gap. By mitigating lender risk and widening borrowing opportunities, the alliance aims to create a more level playing field for high-potential MSMEs that often struggle to secure formal credit.
PHILGUARANTEE’s involvement underscores the government’s intention to mobilize institutional lenders in supporting SME-led growth, while DCFC’s expanding footprint positions it as a key conduit for channeling capital to underserved markets.
As SMEs continue to drive innovation and employment across the Philippines, the DCFC–PHILGUARANTEE partnership is poised to become a critical enabler of entrepreneurship and regional economic resilience.
