The Asia-Pacific Economic Cooperation (APEC) member economies formally launched an initiative that will make financial services accessible to more micro, small and medium-enterprises (MSMEs).
Launched in Makati City, Metro Manila, the Financial Infrastructure Development Network (FIDN) is a network that brought together experts from the public and private sectors, including international organizations and industry associations, to support APEC economies in undertaking financial infrastructure reforms.
While MSMEs contributes to over 60 percent of total employment among APEC economies, he said about 40 percent of the financing needs of this sector were not served.
The establishment of the FIDN is one of the deliverables under the Cebu Action Plan.
FIDN was established as a socialized subgroup in the Asia-Pacific Financial Forum to promote the development of effective credit information systems, as well as secured transactions and insolvency frameworks that would facilitate the use of movable assets as collaterals in the credit markets, increasing MSMEs access to finance.
The FIDN is the recommendation of the APEC Business Advisory Council (ABAC), adopted during the recent APEC Finance Ministers’ Meeting.
The FIDN shall serve as a specialized subgroup within the Asia-Pacific Financial Forum to facilitate workshops, dialogues and studies to support the establishment of legal frameworks for Credit Information Systems, secure transactions and the use of movable assets as collateral.
Even though MSMEs comprise 97 percent of enterprises in the APEC, and employ 50 percent to 80 percent of the workforce, only 15 percent of MSMEs in the region have access to formal financing institutions.