A BUSINESS that is a crucial resource for the community was failing. Imagine the frustration of Jomar, the owner of a small water refilling station in a densely populated barangay in Quezon City. His business provides clean drinking water to hundreds of families every day. But when his filtration system broke down — an essential component for his operation — Jomar found himself in a desperate situation. Despite the steady growth of his business and the trust he had built with his customers, Jomar had no access to the funds he urgently needed to repair or replace the filtration system. Traditional lenders turned him away because he lacked the substantial collateral and extensive paperwork they demanded. The application processes were time-consuming and complicated, and by the time he could have secured a loan, his business would have suffered irreparable damage.

Jomar's story is all too familiar for many small business owners across the Philippines. It's a reality that highlights the significant barriers faced by micro, small and medium enterprises (MSMEs), which make up over 99 percent of businesses in the country and generate more than 65 percent of total employment. Despite their vital role in supporting the economy and providing essential services, these businesses often find themselves excluded from traditional financial services. The existing financial system is yet to improve in terms of accommodating the needs of entrepreneurs like Jomar, who operate with limited assets and face stringent lending requirements.