Access of micro-, small and medium-sized enterprises (MSMEs) to finance in North and Central Asia

Hiroaki Ogawa
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Hiroaki Ogawa: Subregional Office for North and Central Asia, ESCAP

No PB77, MPDD Policy Briefs from United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)

Abstract: Access to financing is one of the fundamental conditions for individuals and small businesses to be able to invest and become entrepreneurs. Several economies in the Asia-Pacific region, including those in the North and Central Asian subregion, however, lag in facilitating such opportunities for potential entrepreneurs. This situation hampers the private sector’s potential contribution to the development of the country, and impedes the process of inclusive income and wealth creation. It might be tempting to advise countries in North and Central Asia to take advantage of FinTech, and hopefully they should aspire to do so: new advances such as crowdfunding or blockchain technology offer great opportunities and leapfrogging is possible. However, currently most countries in the subregion lack basic infrastructure and essential conditions, such as reliable networks and free Internet, to make such a revolution possible on a massive scale. Hence, Governments should ensure the provision of such infrastructure and promote simpler, better-established technologies, such as mobile payments. Opening the mobile market to experienced foreign companies to provide mobile banking services would be another option with considerable potential. Finally, policymakers should also consider enhancing the Internet so that people really consider it as a trustworthy option to seek investment/financing opportunities. The introduction of frameworks to regulate FinTech, so that investors do not face regulatory uncertainty and feel more empowered to invest, would be welcome. As with other fast-evolving technologies, it would be advisable that they take stock of lessons learned from the experiences of other countries which are ahead of the curve.

Date: 2018
New Economics Papers: this item is included in nep-cis, nep-cwa, nep-ent, nep-pay and nep-sbm
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