• World

ADB Calls for Prioritizing MSME Development to Sustain Growth

• By Xinhua News Agency
• October 24, 2023 5:30 PM

MANILA -- Promoting post-pandemic recovery in Asia and the Pacific needs to prioritize the development of micro, small, and medium-sized enterprises (MSMEs), according to a new Asian Development Bank (ADB) report released on Tuesday.

Providing MSMEs with policy and data support "can boost their role as drivers of growth in the future," said the Asia Small and Medium-Sized Enterprise Monitor 2023, which focuses on economies in the Pacific, looking at how small businesses can contribute to resilient growth.

"Job creation is a critical challenge for Asia and the Pacific," said ADB Chief Economist Albert Park. "In the Pacific, remittances sent by emigrants to advanced economies can support small businesses and create employment opportunities for women and younger workers."

"Tourism and agribusiness, where MSMEs actively participate, drive Pacific economies. Their sustainable growth helps strengthen MSME dynamism and raises national productivity," Park said.

MSMEs remain "important drivers of growth" across developing Asia and the Pacific, accounting for an estimated 96.6 percent of all enterprises, 55.8 percent of the workforce, and 28 percent of economic output on average, the report said.

Digitalization offers new growth opportunities for small businesses and promotes formal business registration, "but many in the Pacific continue to use cash for transactions," said the report, noting that key constraints include underdeveloped infrastructure, limited e-payment options, a lack of supportive regulatory frameworks, and a lack of familiarity among small businesses with digital devices or limited literacy in digital operations.

Broadening alternative financing options, particularly digital financial services, can provide growth capital for innovative small firms and startups, helping build a national entrepreneurial base, the report said.