ADB and Mastercard Partner to Boost MSME Financing Across Asia-Pacific, Targeting Women and Climate Goals

"MSMEs are the backbone of economies across Asia and the Pacific, yet many struggle to obtain adequate finance," said ADB Vice-President for Market Solutions Bhargav Dasgupta.

The Asian Development Bank (ADB) and the Mastercard Impact Fund, administered by the Mastercard Center for Inclusive Growth, have launched a transformative partnership to enhance access to financing for micro, small, and medium-sized enterprises (MSMEs) in Asia and the Pacific.

The partnership will initially focus on seven countries: Georgia, India, Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam. With a $5 million grant from Mastercard, the initiative aims to unlock $1 billion in ADB financing over four years. The program will target MSMEs that face significant barriers to accessing capital, with particular emphasis on:

Women-Led and Women-Owned Businesses: Empowering female entrepreneurs who traditionally encounter greater challenges in securing financing.

Climate Finance for Small Businesses: Supporting MSMEs adopting sustainable practices or contributing to climate resilience.

The funds will be used to provide risk-reduction capital, offer performance-based incentives, and enhance the capacity of financial institutions to lend to these critical sectors.

Closing the Financing Gap for MSMEs

The program addresses the region’s $2.5 trillion credit gap for MSMEs, which are often underfunded despite their critical role in job creation and economic development. Nearly half of all MSMEs in the Asia-Pacific region 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," said ADB Vice-President for Market Solutions Bhargav Dasgupta. "This partnership will unlock the potential of MSMEs, especially those run by women or driving climate finance, fostering sustainable and inclusive growth."

Strengthening Resilience and Economic Inclusion

Jon Huntsman, Mastercard Vice Chairman and a board director for the Mastercard Impact Fund, emphasized the partnership’s broader goals: “By bolstering resilience to climate and economic shocks, we are putting more people, communities, and entrepreneurs on the path to financial inclusion and prosperity.”

Mastercard's extensive global network and expertise in secure, accessible digital payments will complement ADB’s development financing and outreach capabilities. Together, the organizations aim to enable MSMEs to thrive, enhance digital inclusion, and contribute to sustainable economic recovery.

Additional Initiatives and Regional Goals

Beyond financing, the program includes capacity-building initiatives to strengthen MSMEs’ operational and financial resilience. For example:

Digital Payment Training: Providing MSMEs with tools and knowledge to adopt digital payment systems, enhancing business efficiency.

Sustainability Workshops: Educating small businesses on adopting environmentally friendly practices.

Performance-Based Incentives: Rewarding financial institutions that meet lending benchmarks for women entrepreneurs and climate-focused businesses.

Broader Implications for Regional Growth

This partnership aligns with broader regional goals to advance the United Nations Sustainable Development Goals (SDGs), particularly gender equality (SDG 5) and climate action (SDG 13).

By addressing systemic barriers and fostering innovation, ADB and Mastercard aim to drive a sustainable economic transformation in the Asia-Pacific region, creating more equitable opportunities for small businesses and entrepreneurs.

Looking Ahead

The program’s success could serve as a blueprint for similar initiatives across other regions, demonstrating the power of public-private partnerships to tackle deep-rooted economic challenges and build more inclusive and resilient economies.