Asean advisory group to focus on MSME development

The Asean (Association of Southeast Asian Nations) Business Advisory Council (BAC) will advance frame­works on developing micro, small, and medium enter­prises (MSMEs) as well as promoting inclusive business models in the region.

Asean-BAC Chairman Jose Ma. Concepcion III, in an interview, said the group adopted the theme of “Part­nering for Change, Prosperity for All” which focuses on en­gaging MSMEs in the global value chain.

“Making micro and small entrepreneurs become sus­tainable, that is our goal,” said Concepcion.

He noted that access to finance remained a major challenge among MSMEs, as many in the sector had no credit history and could not borrow from big banks or opt to tap shark loans and infor­mal sector.

“Access to credit is very important. If the government can provide, if the banks can provide more credit to the SMEs, especially to the micro entrepreneurs, then definitely the higher interest rate lend­ers will disappear,” he added.

The Asean-BAC chair also pushes for strengthening rural banks which can facili­tate financing services to MS­MEs.

“The way forward, and you’re seeing it today, many of the big banks buying rural banks. Because you need an entity like that, that focuses on micro and small entrepre­neurs,” Concepcion said.

“Medium entrepreneurs can easily borrow to bigger banks today because they are larger. But the micro and small, it’s very hard to see a micro entrepreneur walk into one of these big banks. First, they get intimidated. So they’re more comfortable in borrowing to rural (banks), MFIs (microf­inance institutions). That is the trend today now — how can banks practice inclusive financing?” he noted.

Moreover, the Asean-BAC will be pushing for framework adopting inclusive business models in the region.

Through inclusive busi­ness models, big businesses partner with small-scale busi­nesses, including them in the supply chain.

Inclusive business mod­els also provide mentorship to MSMEs.

“Aside from financing, we need a lot of mentors since many entrepreneurs are not college graduates,” said Con­cepcion.