The 21 member economies of the Asia-Pacific Economic Cooperation (APEC) have been urged to provide diversified financial instruments that would suit the changing needs of micro, small, and medium enterprises (MSMEs) in the region.
Chair of the APEC Business Advisory Council (ABAC), Doris Magsaysay-Ho, on Tuesday said broadening the range of financing instruments available to MSMEs is key to achieving financial inclusion and will help these enterprises expand their businesses.
Ho, who is also the president and chief executive officer of A. Magsaysay Inc., made the statement during the APEC SME Finance Forum at the Iloilo Convention Center here.
“We have seen the fruits of our work in the form of economies benefiting from higher levels of trade and investments, lower tariffs, ease of doing business, and our people having wider and cheaper sources of goods and services,” she said.
“Unfortunately, many MSMEs are unable to access financing, thus stifling their ability to grow their businesses, pursue innovation, or comply with minimum standards to enable their participation in local supply chains, much less, global value chains,” she added.
The ABAC chair mentioned the need for a new financing service that would help startups in the region promote innovation.
“We need financing instruments that will provide financing for startups, as well as financial innovation that responds to the changing business models,” said Ho.
She further noted that since the Asia-Pacific region is prone to natural disasters, which impact business operations, MSMEs need to be equipped with “responsive financial instruments that will allow them to mitigate disaster risks for them to recover quickly.”
“We see the great need for financial instruments, such as micro insurance for business continuity and catastrophe bonds, to help communities in their reconstruction,” Ho said.
The ABAC chair also called for digital financing solutions in the region to allow deeper penetration of financial service providers in the market.
“The business models of digital finance are changing the environment for lending, savings, insurance and payments in a way that warrants more attention by policymakers. The economic evolution brought about by the digital revolution affords us options that we have never had before,” Ho said. (PCOO/PNA (kc)