A financial forum was organised in Ho Chi Minh City on September 11 to seek to enhance access to supply chain finance for micro, small and medium sized enterprises (MSMEs).
Entitled “Leveraging technologies to scale up supply chain finance”, the forum was part of the 24th APEC Small and Medium Enterprises Ministerial Meeting, which is taking place in the City from September 10-15.
SMEs account for approximately 97 percent of businesses in the APEC region but account for only 35 percent or less of direct exports. The Asia – Pacific Financial Forum (APFF) has done considerable work in financial infrastructure reforms (secured transactions, credit reporting and insolvency) as well as trade and supply chain finance in support of MSMEs.
|At the Leveraging technologies to scale up supply chain finance forum.
These need to be disseminated to the policy-making, financial institution and MSME communities through APEC Financial Infrastructure Development Network (FIDN) under APEC Viet Nam 2017. The emphasis for the current project activities will be the "digital" angle.
At the event, APEC's experts believe that finance using non-traditional data (e.g., from e-commerce and payments), leveraging the electronic finance platforms, based on movable assets, etc. are the new ways to upgrade the MSME finance markets in APEC Economies.
According to experts, traditional sources of finance for MSMEs have been banks, but it has been very difficult for MSMEs to access finance through this source, mainly because in most developing countries in the region, they do not have the financial infrastructure.
APEC's experts also agreed on measures to strengthen the understanding and cross-economy exchanges among the policy-makers and practitioners about the latest digital innovations and financial infrastructure reforms in the space of MSME finance. Activities will be done in collaboration with FIDN. As a key initiative under the Cebu Action Plan (CAP), FIDN was formally launched on November 12, 2015.
The 2015 APEC Finance Ministers Meeting recognized that FIDN seeks to promote the development of effective credit information systems, secured transactions and insolvency frameworks that would provide a better foundation to enable financial institutions to support MSMEs. Further, the 2015 APEC Economic Leaders Meeting welcomed the establishment of FIDN under CAP, recognizing the importance of MSMEs’ access to finance as a key enabler for MSME growth, internationalization and productivity improvement.
The APEC's economists then agreed to provide a platform for open dialogues between the public and private sectors on the opportunities and challenges of access to financial services by MSMEs in Viet Nam and in the region under an increasingly digital context (e.g., many more data are now available for lending purposes); to further promote modern secured transactions and credit reporting reforms in support of MSME finance; to provide for networking and cross-fertilization among MSMEs experts from the public and private sectors across the region.
To link the extensive work that APFF has completed on MSME financing and the many financial institutions that are members of APFF with the MSME community; and to advocate for the development of digital finance platforms which link up value chain players for financing purpose and can reduce transaction cost for the borrowers.By Phung Nguyen