December 2, 2024 | 12:00am
MANILA, Philippines — lMicro, small and medium enterprises (MSMEs) in the Philippines are among the initial target beneficiaries of financing from the Asian Development Bank (ADB) and Mastercard to support small businesses in Asia-Pacific.
In a statement, the ADB said it signed a memorandum of understanding with Mastercard Impact Fund, administered by the Mastercard Center for Inclusive Growth, for the partnership aimed at providing financing to MSMEs in the Asia-Pacific region.
“The initiative will initially target Georgia, India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam,” the ADB said.
Under the initiative, Mastercard will provide a $5-million grant to support up to $1 billion ADB financing to financial institutions for lending to MSMEs over a four-year period.
The initiative will focus on women-led or -owned MSMEs and climate finance for small businesses.
“MSMEs are the backbone of economies across Asia and the Pacific, yet many struggle to obtain adequate finance,” ADB’s vice president for market solutions Bhargav Dasgupta said.
“By combining the resources and expertise of ADB and Mastercard, this facility will unlock the potential of MSMEs, particularly those run by women or supporting climate finance, empowering businesses and fostering inclusive and sustainable economic growth across the region,” Dasgupta added.
While MSMEs play a vital role in driving economic growth, job creation and in achieving regional development goals, access to financing is a challenge for the sector in the region, with nearly half either unserved or underserved, leading to a credit gap estimated at $2.5 trillion.
In the Philippines, MSMEs are a major driver of economic growth as they account for 99.5 percent of the registered business establishments and 60 percent of the workforce.
Jon Huntsman, Mastercard vice chairman and Mastercard Impact Fund board director said the partnership with the ADB would deepen ongoing initiatives in the Asia-Pacific region to support entrepreneurs and small businesses.
“By bolstering resilience to climate and economic shocks, we are putting more people, communities and entrepreneurs on the path to financial inclusion and prosperity,” he said.
At present, Mastercard operates in over 200 countries and territories worldwide, supporting a wide range of digital payment choices for more secure, simple and accessible transactions.
ADB, meanwhile, is providing assistance to its members and partners by providing loans, technical assistance, grants and equity investments to promote social and economic development in Asia-Pacific.
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