The Manila, Philippines-based Association of Development Financing Institutions in Asia and the Pacific (ADFIAP), www.adfiap.org with its 127 development bank members in 44 countries has found a unifying initiative to advocate for and help small and medium enterprises (SMEs) gain access to knowledge and finance.
Description and Rationale
ADFIAP’s SME Finance Initiative (SME/FI) is a knowledge and business network that puts together the resources of development banks, other specialized financial institutions, and development organizations in different countries to address specific issues in the financing of and other support services to SMEs.
The initiative was borne out of the fact that SMEs play a critical role in the sustainable growth and economic development of the Asia-Pacific region. About 90% of businesses in the region are SMEs contributing to more than 60% of employment, representing about 30% of GDP, and from 10 to 60% of manufacturing exports. SMEs were also instrumental in helping economies recover from the harsh effects of the recent global financial crisis by generating additional job and income opportunities and tax revenues for governments.
The three components of the SME/FI are: (1) The CEO Forum, – the dialogue and business networking event where development bank chief executives meet and learn from their own experiences as well as from experts of other organizations worldwide (2) The SME/FI website the “Knowledge Net on SME Finance” and (3) The SME Training and Advisory Center , – that undertakes training programs and technical assistance on SME finance to assist members strengthen their capabilities in SME banking.
Current Activities and Reach of the Project
Thanks to the SME/FI’s three key channels of communication and dissemination – the CEO Forum, the website and the training center – its reach has widened and its scope has broadened. Currently, SME/FI’s activities are directed towards providing a platform for financial inclusion initiatives at the operational level, focusing on how to bridge the financing gap between SMEs and financial institutions. These activities address what interventions SMEs need in order to succeed and become “bankable”; and what role DFIs and other financial institutions should play in advancing financial inclusion of SMEs in the region.
Present activities include collaborative projects with various domestic and regional institutions, such as the Sustainable Program for SMEs project, the SME Financial Inclusion program, an SMEs for Environmental Accountability, Responsibility and Transparency (SMART) project, international operational dialogues with key stakeholders on SME financial inclusion and setting up an apex organization to respond to the specific needs of SMEs in the region to make them more attractive to financial institutions and investors.
ADFIAP describes this strategy in pursuing this catalytic role of associations as “development by partnership” wherein it capitalizes and harnesses the strengths of like-minded institutions and works in a concerted effort with and through them to transform its SME development and finance advocacy into reality.