The Asian Development Bank (ADB) and the Mastercard Impact Fund, administered by the Mastercard Center for Inclusive Growth, have signed a memorandum of understanding to establish a groundbreaking partnership aimed at supporting micro, small, and medium-sized enterprises (MSMEs) across Asia and the Pacific.

The initiative will initially target Georgia, India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, ADB said in a statement on Thursday.

According to the statement, the partnership will leverage a $5 million grant from Mastercard to financial institutions, to catalyze lending toward MSMEs, with a focus on women-led or -owned MSMEs and climate finance among small businesses.

The grant will support up to $1 billion of ADB financing over a four-year period, providing risk-reduction capital, performance incentives, and capacity building for financial institutions.

“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,” said ADB’s Vice-President for Market Solutions Bhargav Dasgupta.

It is noted that MSMEs in Asia and the Pacific face significant financing challenges, with nearly half either unserved or underserved—resulting in a credit gap estimated at $2.5 trillion.

This is despite the sector’s pivotal role in driving economic growth, job creation, and in achieving regional development goals.

“This partnership deepens the work we’re doing in the Asia and 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,” said Mastercard Vice Chairman and Mastercard Impact Fund Board Director Jon Huntsman.

Mastercard operates in more than 200 countries and territories worldwide.

Together with its customers, it builds sustainable economies where everyone can prosper.

It supports a wide range of digital payment choices, making transactions secure, simple, smart, and accessible.

Meanwhile, ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.

Established in 1966, it is owned by 69 members — 49 from the region.

#InclusiveGrowth #MSMEFinance #WomenEmpowerment #ClimateFinance #SustainableDevelopment #Ifvex