ADB and Mastercard Support MSMEs with $1B Financing

ADB and Mastercard Announce $1 Billion Initiative for MSMEs

Manila, Philippines — The Asian Development Bank (ADB) and Mastercard have established a partnership project to promote Micro, Small, and Medium Enterprises (MSMEs) across the Asia-Pacific region, including the Philippines. This collaboration will focus on providing businesses, particularly those managed by women or active in climate finance, with critical financing to promote development and resilience.

The ADB recently announced that it has inked a memorandum of understanding with the Mastercard Impact Fund to support a $1 billion financing initiative over four years. MSMEs in Georgia, India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam will benefit from this project.

Mastercard will donate a $5 million grant to ADB's financing operations, which will focus on providing loans to financial institutions that support MSMEs. The major purpose is to maximize the potential of the region's businesses, particularly those headed by women or focusing on climate financing.

“The MSMEs are the backbone of economies in Asia and the Pacific, yet they face significant barriers when it comes to accessing finance,” said Bhargav Dasgupta, ADBs vice president for market solutions. “This collaboration will provide the necessary resources and expertise to help these businesses thrive, promoting inclusive and sustainable growth.”

Despite their vital role in job creation and economic growth, many MSMEs are either unserved or underserved, with a credit deficit estimated to be $2.5 trillion in the area. MSMEs in the Philippines account for 99.5% of all registered firms and employ 60% of the labor force, emphasizing their importance to the national economy.

Mastercard's vice chairman, Jon Huntsman, underscored the partnership's significance, saying, “This initiative will assist entrepreneurs in overcoming economic and climate shocks, driving financial inclusion and prosperity.”

This relationship will be critical in tackling MSMEs' financing issues and enable them to contribute even more to regional growth.

Last Thoughts

ADB and Mastercard's partnership is a crucial step toward aiding MSMEs in the Philippines and other countries of Asia-Pacific. This project has the ability to produce long-term beneficial change in the region's economy by concentrating on women-owned enterprises and those engaging in climate financing. MSMEs will not only receive access to crucial funds through this initiative but they will also be enabled to face future problems, thus contributing to the creation of a more inclusive and sustainable economy.