ADB and Mastercard share a common goal to foster inclusive economic growth, particularly in developing economies where MSMEs are the backbone of the business ecosystem.
The Asian Development Bank (ADB) and Mastercard Impact Fund have entered a partnership aimed at enhancing access to financing for micro, small, and medium-sized enterprises (MSMEs) across Asia and the Pacific with a particular focus on female-led businesses and climate finance.
The partners will leverage digital technology to address critical challenges faced by MSMEs, including limited access to credit and digital tools necessary for modernization. The collaboration aims to integrate these small businesses into the broader digital economy, enabling them to manage cash flow, build resilience, and expand operations effectively by providing risk-reducing capital, incentives and capacity-building support. The initiative is financially supported by a US$5 million grant from the Mastercard Impact Fund and up to US$1 billion of ADB financing.
By mobilizing financing through innovative mechanisms, the partners also seek to bridge the significant trade financing gap — estimated at $2.5 trillion in emerging markets — while focusing on creating sustainable solutions for long-term economic stability.
In the Asia-Pacific region, 43% of formal small and medium enterprises (SMEs) are either underserved or completely excluded from financial services. Women-owned MSMEs face even greater barriers, with 70% struggling to access the funding they need. While in 2018, only 4% of investment funds were allocated to all-women businesses, that figure dropped to 2% by 2021. Besides, the share of transactions involving female-led businesses has remained stagnant at just 6%. Therefore, ADB and Mastercard will specifically focus on this MSME category.
Over the next four years, at least 50% of the Asian Development Bank’s (ADB) financing will be allocated to women-led or women-owned MSMEs and climate-focused initiatives among small businesses. The initial phase of this effort will focus on key target markets, including India, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, and Georgia.
This initiative builds on ADB’s and Mastercard’s longstanding efforts to support MSMEs, ensuring that these businesses, particularly women-led enterprises, climate-focused startups and those businesses that operate in underserved regions, can thrive in a rapidly digitalizing world.
In 2023, ADB launched the Innovative Finance Facility for Climate in Asia and the Pacific program to enhance support for the region in the battle against climate change.
Meanwhile, Mastercard has introduced a range of initiatives to support small businesses in various corners of the world. Some examples are the festive and interactive shopping experience in Fort Langley, B.C., Canada, a partnership with KaiOS to Deliver Affordable Payment Acceptance Devices to African SMEs, or the Mastercard Strive Women initiative that aims to strengthen the financial well-being of small businesses in the APEC economies, focusing on female-led enterprises.
