Visa and the International Finance Corporation have announced a new risk-sharing facility aimed at broadening digital payments funding across emerging markets. The initiative is designed to help financial institutions in underserved regions connect more consumers and small businesses to formal digital payment ecosystems, addressing a persistent gap in financial inclusion.
How the Risk-Sharing Facility Works
Under the agreement, IFC will share credit settlement risk for Visa transactions linked to enrolled financial institutions. This mechanism is intended to reduce constraints that currently limit the participation of institutions with below-investment grade ratings in global payment networks. By absorbing a portion of the settlement risk, the facility enables these institutions to offer secure and reliable digital payment solutions to populations that have historically lacked access.
The risk-sharing facility is expected to support approximately $200 million over a five-year period. Its initial scope covers 14 countries in Latin America and the Caribbean, targeting roughly 50 financial institutions. The partnership between Visa and IFC aims to help these institutions through enable millions more people and small businesses to save, spend, borrow, and grow within the formal economy.
Paul Fabara, Visa’s Chief Risk and Client Services Officer, said that access to digital payments can help unlock economic opportunity. He described the Visa IFC partnership as a first-of-its-kind collaboration through which Visa will help financial institutions bring payment solutions to more people and small businesses in emerging markets. Fabara added that together, the two organizations can expand financial inclusion and help more communities participate in and benefit from the global economy.
Expanding Financial Inclusion Through Partnership
Mohamed Gouled, IFC’s Vice President of Products and Clients, stated that the initiative exemplifies the power of innovation and partnership to expand economic opportunity where it is needed most. He noted that by reducing constraints limiting participation of financial institutions, the facility is enabling greater access to digital payment solutions for small businesses and entrepreneurs across emerging markets. Gouled emphasized that this will help them reach new customers, scale operations, and create jobs, ultimately driving sustainable growth and delivering lasting impact.
Digital financial services can increase the speed, security, and transparency of transactions while giving consumers and businesses more ways to engage in the global economy. The digital payments funding structure of this risk-sharing facility is designed to support broader participation in digital payment ecosystems by helping enrolled financial institutions access Visa’s global network across emerging markets. The initiative represents a significant effort to bring more underbanked populations and small enterprises into the formal financial system through targeted collaboration between the private sector and a development finance institution.