For a small business, access to credit is often treated as a yes-or-no question: can the business qualify for a loan?
The question is certainly black or white.
But what most miss is that businesses don't stay the same size after gaining access to a loan.
A business may start by borrowing to restock inventory or cover a short-term cash gap. As it grows, its needs can change. It may need more working capital, a larger facility, or financing at a different point in its operating cycle.
So, what if access to credit could evolve with the business, too?
Data from loans given by our lending partners through the PayMongo platform offers an early view into what that can look like. Between January to July 2024 and January to July 2026, the average loan originated through the PayMongo platform nearly quadrupled, from ₱242,000 to ₱946,000.
Over the same period, the number of loans disbursed grew 60%, while total capital deployed grew 524%. In other words, lending grew much more through larger loans than through more loans.
This matters in a country where access to finance remains a constraint on SME growth. The World Bank has identified access to finance as a barrier for Philippine businesses, while the ADB estimates that MSME loans account for just 3.9% of total Philippine bank lending and 2.1% of GDP.
But the question isn't simply whether businesses can get credit. It's whether the financial system can respond as their needs and financial track record change.
For merchants on PayMongo, lending partners can use transaction history built through the platform as part of their underwriting. PayMongo facilitates the credit experience; lending partners provide the financing.
We compared matched periods across 2024, 2025 and 2026 to limit the effects of seasonality and incomplete-year comparisons.
Loan sizes are getting bigger
The lending data shows that the amount of capital being accessed is changing. As mentioned, capital deployed grew 524%, compared with 60% growth in loan count, while the average amount per loan increased from ₱242,000 to ₱946,000.
Part of that change reflects the fact that the products themselves have evolved.
The Product Ceiling Moved
PayMongo Capital launched in November 2023 with lending partners offering loans capped at ₱500,000. Our lending partners now offer term loans of up to ₱3 million and a revolving line of up to ₱10 million. The ceiling therefore rose at least sixfold across the comparison window, more than the 3.9x increase in average loan size.Put differently, merchants are borrowing larger amounts while filling a smaller proportion of the available maximum. This means the increase in average loan size partly reflects larger facilities becoming available, rather than merchants borrowing more against an unchanged product.
This also suggests that when larger amounts of credit become available, there is demand for them.
Repeat borrowing is another part of the picture
Roughly one in five merchants who complete a loan takes another within six months. That shows that borrowing is not always a one-time event.
While higher loan amounts suggest that merchants are willing to access more capital when it is available, repeat borrowing suggests that flexible terms and continued loan eligibility can encourage merchants to access capital again as their needs change.
Higher acceptance
Between 2025 and 2026, our lending partners extended fewer credit offers while a higher share of those offers were accepted. Offers fell about 10%, while the acceptance rate rose by roughly 58% on a relative basis.
This suggests that increasing the number of offers was not, by itself, enough to increase borrowing. Reaching merchants who are more likely to need credit may matter as much as the number of offers extended.
This may also suggest that the growing merchant base is becoming more receptive to borrowing, as credit offers are increasingly directed toward merchants who are more likely to need it.
What this suggests about the Credit Gap
The data points to a different way of thinking about the credit gap. Access to credit does not have to be a one-time assessment. It can evolve as a business builds a financial track record.
Transaction-based underwriting uses a business's ongoing activity to inform credit decisions. As merchants build more transaction history, lenders can potentially develop a clearer picture of how the business operates and how much financing it may need.
That can work in both directions. For businesses, it can create a path to credit based on their operating activity rather than relying solely on collateral or information fixed at the time of application. For lenders, it provides a more current view of the businesses they are assessing.
The data we see on PayMongo is consistent with that model: merchants are accessing larger loans, acceptance is increasing even as the number of offers falls, and some merchants return for additional credit.
The opportunity is not just to make more credit available. It is also to make credit more responsive to the businesses using it. A small business does not necessarily remain a small borrower.
The next question is whether individual businesses actually graduate into larger amounts of credit as they build a longer transaction history.
Methodology:
Figures compare matched January to July periods for 2024, 2025 and 2026, covering merchants transacting on the PayMongo platform. Loan-size figures are blended across lending products. Repayment performance is deliberately excluded from this analysis: loans disbursed in 2026 have not had time to mature, and any year-on-year repayment comparison would measure loan age rather than borrower behaviour.