THE Asian Development Bank (ADB) and the Mastercard Impact Fund have forged a new partnership to address the pressing financing challenges facing MSMEs in Asia and the Pacific.
This collaboration, facilitated by the Mastercard Center for Inclusive Growth, will initially focus on seven countries in the region: Georgia, India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam.
Leveraging a US$5 million grant MasterCardThe initiative will provide financial institutions with de-risking capital, performance incentives and capacity building to encourage lending to MSMEs.
The program will prioritize MSMEs led or owned by women and those engaged in climate finance.
This grant is expected to support up to $1 billion in ADB financing over a four-year period.
The partnership aims to address the significant credit gap faced by MSMEs in the region, estimated at US$2.5 trillion.
Despite their crucial role in economic growth and job creation, almost half of all MSMEs in Asia and the Pacific are unserved or underserved by financial institutions.
“MSMEs form the backbone of economies across the Asia-Pacific region, but many struggle to obtain adequate financing.
By combining the resources and expertise of the AfDB and Mastercard, this facility will unlock the potential of MSMEs, particularly those led by women or supporting climate finance, by empowering businesses and fostering inclusive and sustainable economic growth in the region.
said Bhargav Dasgupta, ADB Vice President for Market Solutions.
“This partnership deepens the work we do in the Asia-Pacific region to support entrepreneurs and small businesses, who are the lifeblood of communities and economies.
By building resilience to climate and economic shocks, we put more people, communities and entrepreneurs on the path to financial inclusion and prosperity.
said Jon Huntsman, vice president of Mastercard and board director of the Mastercard Impact Fund.