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MSME Access to Digital Finance Study: in Selected EMDE Countries in Asia

Feb 02, 2025

By Krishnamurthy Suresh (Principal Researcher, CCAF), Felipe Ferri de Camargo Paes (Principal Researcher, CCAF), Loh Xiang Ru (CCAF), Richard Kithuka (CCAF), Peter Morgan (ADBI), Pavle Avramovic (CCAF), and Bryan Zhang (CCAF).

This is the second edition of our ‘Access to Digital Finance’ study in Asia-Pacific. Building on our previous publication, the ‘ASEAN Access to Digital Finance’, the second edition explores the role of digital finance providers in enhancing access to credit and improving the financial health of micro, small and medium enterprises (MSMEs) in selected emerging markets and developing economies (EMDEs) in Asia. The research is based on the survey responses from 819 MSME users of digital finance platforms operating across 7countries:
  • Bangladesh
  • China
  • India
  • Kazakhstan
  • Mongolia
  • Pakistan
  • Vietnam
This study, conducted by the Cambridge Centre for Alternative Finance (CCAF) and the Asian Development Bank Institute (ADBI), offers key insights for regulators, policymakers and other stakeholders on how digital finance platforms improve MSME access to finance, promoting fintech ecosystem growth and MSME development.
 
Highlights from the report
 
The main findings of the report include:
 
1. Most digital finance users of MSMEs were sole traders, followed by micro and small enterprises
Approximately 60% of the MSMEs surveyed were sole traders, with micro (fewer than 10 employees) and small (10-49 employees) enterprises making up 92% of the sample. Most of these businesses engaged in retail or wholesale trade and operated under traditional structures (using physical premises). Millennials, aged 25-44, comprised the largest proportion of business owners.
 
2. Convenience, an important decision-making factor
MSMEs generally considered better approval rates, better customer service, swift fund disbursement, simplified application process, and flexible payment terms as key decision-making factors when financing through digital finance platforms.
 
3. Primary purpose of borrowing was to meet short-term financing needs
Overall, loan values among MSMEs were low and were primarily borrowed to meet working capital or growth requirements, such as payment to suppliers, purchase of raw materials/inventory and to cover unexpected business cash flow needs (such as customer defaults). Most businesses were able to repay loans from digital finance providers, with an overall default rate under 1%.
 
4. Growth in business performance post-financing
Around 80% of the businesses reported growth in revenue, net profit and customer base as a result of financing through digital finance platforms. It positively impacted their business through expansion, asset purchases, and increased inventory/raw materials. Businesses also noted an increase in the use of traditional finance products as a result of digital financing.
 
5. Need to promote adequate disclosure and digital financial literacy among users
Most MSMEs had no major concerns using digital finance platforms, but difficulties in operating devices, lack of understanding of fintech products, and lack of transparency in borrowing costs were cited as significant issues.
 
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Cambridge Centre for Alternative Finance (CCAF) is an Affiliate of the SME Finance Forum

 

https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publicat…
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WeGro, a leading agri-fintech in Bangladesh, joins the SME Finance Forum

Jul 15, 2024

Washington D.C, July 15, 2024 – WeGro, a leading agri-fintech in Bangladesh has joined the SME Finance Forum as the global membership network’s latest member. The 300+ members/affiliates of the Forum are SME financing experts operating in 190 countries who share the common goal of expanding access to finance to small businesses worldwide through knowledge exchange and innovation.

“It is with great pleasure I welcome WeGro to SME Finance Forum which is in line with our strategy of onboarding leading fintech in emerging markets for impact,” said Qamar Saleem, Head of SME Finance Forum.

WeGro is a tech-based startup that is working towards revolutionizing the archaic agriculture industry by integrating the latest technology in all aspects of the agri-supply chain facilitating small holder farmers access to finance, inputs and markets.

“We at WeGro are delighted to join the SME Finance Forum. This global network offers invaluable learning opportunities to enhance our mission-driven approach, developing a sustainable impact in the agri-fintech sector.,” said Md Mahmudur Rahman, Managing Director & CEO of WeGro.


SME Finance Forum: Innovation & Partnership for MSMEs Growth 

The SME Finance Forum, backed by G20 and IFC/World Bank, is the leading global network of 300+ members/affiliates operating in 190 countries. Network comprises of SME focused institutions providing and enabling finance and services- banks, non-banks financial institutions, fintech, payment platforms, development institutions, credit guarantee companies, insurers, investment funds, supply chain linked players, banking and SME associations, policy advocates, regulators, academia, consulting houses, knowledge aggregators.

Our member, affiliates, and associated stakeholders benefit from learning/replicating best practices from across the world, innovating new products for business growth, acquiring risk mitigation tools, establishing partnerships, attracting investors, and being recognized amongst a peer group of global innovators. Our products consist of “members only” solutions (like innovation hubs, solutions clinics, peer group networks, study tours, specialized tools and trainings, member portal repository, partnered initiatives) as well as public good services (200+ publications library, 500+ videos, webinars, newsletters, trainings, annual awards, annual event etc.)

Discover the SME Finance Forum members/affiliates: 
https://www.smefinanceforum.org/members/member-list
https://smefinanceforum.org/about/partners
 

About WeGro
WeGro is a tech-based startup that is working towards revolutionizing the archaic agriculture industry by integrating the latest technology in all aspects of the agri-supply chain facilitating small holder farmers access to finance, inputs and markets.

Learn more: 
Website: www.wegro.global

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Fireside Chat Series - Interview with Selim Hussain, Managing Director and CEO of BRAC Bank

Dec 09, 2020

The SME Finance Forum's "Fireside Chat" is a new series of one-on-one interviews with CEOs, senior executives of financial institutions and technology companies as well as financial sector regulators. 

In this edition, Selim Hussain, Managing Director, and CEO of BRAC Bank, shared how early decisions made in response to COVID-19 helped overcome the challenges and business continuity, and the role of digitalization among others. A powerful story about how to turn even the greatest challenges into opportunities.

 

 

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Neera, a Prime Bank Initiative for Women

Sep 25, 2020
Women play a significant role in the development of our economy but are one of the most vulnerable groups impacted by unprecedented events. The ongoing pandemic has heightened the need to address the gender finance gap in societies around the world and drive initiatives to support them in achieving financial independence.  
 
We’re proud to see our member Prime Bank leading the way to ensure financial inclusion, financial independence, and complete wellness of women at all levels of their journey through their latest initiative Neera. 
 
“We are proud to be the first local bank in the country to recognize the needs of the hardworking unwaged women and offer them a one-of-a-kind financial solution to avail loans for short-term emergencies without any banking history. NEERA is a huge step towards changing banking perception and driving financial inclusion. We are here to make a difference by reaching women at a more personal level - by being a part of their personal growth and journey.” said Prime Bank  
 
Read more about Neera, here. 
You can also follow them on LinkedIn and Facebook. 
 
 
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Member News: Prime Bank Limited joins SME Finance Forum to support MSME banking in Bangladesh

Sep 03, 2020
Washington D.C., September 3rd, 2020- We’re excited to share that Prime Bank joined the SME Finance Forum global membership network. We bring together development financial institutions, banks, and fintechs from around the world to support SMEs through knowledge exchange, policy change, and impactful partnerships.  
 
“When we started in 2012, we were in an exploratory phase for the first few years. Since 2016, we’ve been implementing our mission to build a global membership to support better SME financing, and since then, we’ve established a network with over 190 active members, who operate in over 190 countries sharing the common purpose of helping under-served enterprises. We are delighted to welcome Prime Bank to further grow our mission.” said Matthew Gamser, CEO of the SME Finance Forum.   
 
Prime Bank is a market-driven institution providing financial services like consumer and wholesale banking, sustainable finance, and MSME banking. They offer competitive rates and convenient loan features to maximize customer value. Over the years, they have received numerous financial institution awards for their service and performance. As Bangladesh starts journey to graduate into middle income country, Prime Bank strives to contribute to the government’s development journey through entrepreneurship development especially in MSME. Prime Bank is committed to easy access to finance to MSME businesses with innovative and tailor-made banking solutions. 
 
“Our mission is to support MSMEs in Bangladesh with enterprise development services, loan products, trade services, and deposit products. With the help of the Forum, we can further improve our institutional knowledge of SME banking and interact with peers and stakeholders globally,” said Rahel Ahmed, Managing Director and CEO of Prime Bank Limited. 
 
About SME Finance Forum  
The SME Finance Forum was established by the G20 Global Partnership for Financial Inclusion (GPFI) in 2012 as a knowledge center for data, research, and best practice in promoting SME finance. As an implementing partner for the GPFI, the International Finance Corporation (IFC) was tasked with managing the initiative.   
 
To see all SME Finance Forum members, please visit: https://www.smefinanceforum.org/members/member-list
 
About Prime Bank 
Prime Bank Limited, traded as ‘PRIMEBANK’ on Dhaka Stock Exchange, has been one of the fastest growing banks in Bangladesh with consistent financial performance since its inception in 1995. The bank remains in the forefront of innovative solutions aided with new technology and fintech solutions. With 146 branches, 170 ATM and powered by more than 3,200 passionate employees, the bank has established its unique mark in Corporate, Consumer, MSME and Sustainable Banking. Its `AA’ credit rating, ADB, SAFA, Euromoney, AsiaMoney, Global Finance Awards and strong commitment to sustainability speak of its good governance compliance, transparency and accountability. 
 
Media Contact  
Carina Carrasco  
 

S-Commerce: a Catalyst for Women’s Financial Inclusion in Bangladesh

Jan 29, 2020

IDLC Finance - Empowering Women Entrepreneurs: A Partnership Beyond Financing

Submitted by fsiddique@ifc.org on

IDLC Finance Limited, a founding member of the SME Finance Forum, was established in Bangladesh in 1985 as the country’s first-ever leasing company, with equity investment from IFC, the Government of Bangladesh and other investors. Since 2009, IDLC has been growing rapidly and its SME lending portfolio has been one of the major drivers of its growth. 

Bangladesh

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Bangladesh
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WeGro

WeGro is a tech-based startup that is working towards revolutionizing the archaic agriculture industry by integrating the latest technology in all aspects of this agri-supply chain facilitating small holder farmers with access to finance, inputs and markets.

Country / Region
Bangladesh
Member Since
Organization Type
Fintech
Profile Link
Find out more
Operation countries
Bangladesh

Prime Bank

Prime Bank, is a top-tier second generation local commercial bank in Bangladesh established in 1995. Headquartered in the heart of Dhaka's bustling financial hub Motijheel, the Bank has 146 branches and 170 ATM locations.

Country / Region
Bangladesh
Member Since
Organization Type
Financial Institution
Profile Link
Find out more
Location
23.804093, 90.4152376
City/Town location
Dhaka
Operation countries
Bangladesh
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