The Asian Development Bank (ADB) and the Mastercard Impact Fund have forged a new partnership to tackle the pressing financing challenges faced by MSMEs in Asia and the Pacific.

This collaboration, facilitated by the Mastercard Center for Inclusive Growth, will initially focus on seven countries in the region – Georgia, India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

Leveraging a US$5 million grant from Mastercard, the initiative will provide financial institutions with risk-reduction capital, performance incentives, and capacity building to encourage lending to MSMEs.

The programme will prioritise women-led or -owned MSMEs and those engaged in climate finance.

This grant is expected to support up to US$1 billion of ADB financing over a four-year period.

The partnership seeks to address the significant credit gap faced by MSMEs in the region, which is estimated at US$2.5 trillion.

Despite their crucial role in economic growth and job creation, nearly half of all MSMEs in Asia and the Pacific are either unserved or underserved by 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.

“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.