Tag: ADB

Manila, Philippines – The Asian Development Bank (ADB) and the Mastercard Impact Fund, administered by the Mastercard Center for Inclusive Growth, announced a landmark partnership to promote financial inclusion and access for MSMEs across the Asia-Pacific region. 

The collaboration will leverage a US$5m grant from the Mastercard Impact Fund to support up to US$1b of ADB financing to financial institutions for lending toward micro, small, and medium enterprises (MSMEs). 

The Mastercard Impact Fund aims to accelerate ADB’s efforts to deliver financing to MSMEs across Asia-Pacific, including the Philippines, by providing a US$5m grant in the form of risk-reducing capital, incentives and capacity building support to financial institutions. The mitigation of credit risk and technical assistance support is expected to catalyse lending by financial institutions, toward unserved or underserved MSMEs. 

In the Philippines, MSMEs account for 99% of all business establishments and employ roughly 63% of the country’s workforce. However, despite being considered the economic backbone of the country, many MSMEs remain financially excluded. This sector is among the underserved segments by financial institutions, underpinning the need for increased MSME support. 

At least 50% of ADB’s total financing will go towards women led or owned MSMEs and climate finance among small businesses deployed over a period of four years. The initial target markets include India, Indonesia, Malaysia, Philippines, Thailand, Vietnam, and Georgia. 

This partnership between the Mastercard Impact Fund and ADB marks a significant step towards addressing critical MSME financing gaps in the region. By leveraging their combined expertise and resources, both organizations are committed to fostering sustainable growth and inclusive prosperity for MSMEs throughout Asia and the Pacific.

Bhargav Dasgupta, vice president of market solutions at ADB, said, “MSMEs are the backbone of economies across Asia and the Pacific, yet many struggle to obtain adequate finance. 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.”

Meanwhile, Jon Huntsman, vice chairman of Mastercard and Board Director of the Mastercard Impact Fund, remarked, “This partnership deepens the work we’re doing in the Asia-Pacific region to support entrepreneurs and small businesses, which are the lifeblood of communities and economies. By bolstering resilience to climate and economic shocks, we are putting more people, communities and entrepreneurs on the path to financial inclusion and prosperity.”

Lastly, Ari Sarker, president for Asia-Pacific at Mastercard, commented, “Despite their long-established significance to economies, MSMEs continue to be challenged by access to credit – the fundamental resource which can catalyze growth for them and their economies. For growth to be truly inclusive, closing the MSME funding gap needs to be a core focus for both public and private sectors. This partnership is a meaningful step in that direction.”

Manila, Philippines – The Asian Development Bank (ADB), the regional bank headquartered in Manila, has announced that it has signed a $25m loan with Vietnam’s Tien Phong Commercial Joint Stock Bank (TPB) to expand access to finance of women-owned and -led small and medium-sized enterprises (WSMEs) in Vietnam. The project is also cofinanced by DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) for $25m. 

Furthermore, the loan is accompanied by a $750,000 technical assistance grant to help TPB better meet the needs of WSMEs. The grant will be used to build TPB’s capacity to lend to WSMEs, hire staff, and promote its services to female borrowers. It will also enable TPB to use digital systems to analyze the underserved WSME market. The grant is funded by the Women Entrepreneurs Finance Initiative (We-Fi), which is hosted by the World Bank Group.

“We are very pleased to partner with TPB and We-Fi to support WSMEs, which are important channels to increase women’s participation in Vietnam’s economic development,” said ADB’s Director General for Private Sector Operations Suzanne Gaboury.

“COVID-19 has severely affected many businesses, and initiatives such as this loan and grant will support particularly underserved female borrowers by helping TPB develop systems and procedures to improve their access to finance,” adds Gaboury.

ADB shares data that as of 2018, the majority of businesses in Vietnam are classified as SMEs, supporting 38% of the country’s employment and generating 40% of gross domestic product. But their access to finance is still a challenge, with only 37% of WSMEs able to obtain loans from banks, according to a 2017 study. 

“ADB, DEG, and TPB’s goals are uniquely aligned especially in our mutual support of WSMEs,” said TPB’s Chief Executive Officer Nguyen Hung.

 “We will continue to leverage our strength in digital banking to tailor products and services for WSMEs and plan to increase supply chain financing and support services, liquidity, and digital banking products to reach underserved customers,” added Nguyen Hung. 

TPB is one of the leading joint-stock banks in Vietnam. Currently, it has digital platforms targeted to help meet the needs of its retail and SME customers by offering innovative and customized products.