ILOILO CITY: The Asia Pacific Economic Cooperation (APEC) will be launching the Financial Infrastructure Development Network (FIDN) this year.
In a press briefing of APEC SME Finance Forum in the city, GE Capital International Commercial Distribution Finance Leader in Asia Christopher Wohlert shared that APEC will launch the FIDN in the latter part of 2015.
The FIDN is the recommendation of the APEC Business Advisory Council (ABAC) adopted in the Cebu Action Plan in the recent APEC Finance Meeting.
The FIDN aims to promote an enabling financing environment for micro, small and medium enterprises (MSMEs) to improve the sector’s access to finance.
“Given the myriad financing challenges facing MSMEs, ABAC welcomes the adoption by the Finance Ministers, at their meeting in Cebu, of our recommendation for the establishment of a public-private FIDN,” said ABAC Chair Doris Magsaysay-Ho.
“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, secured transactions and the use of movable assets as collateral,” she explained.
APEC region has emphasized the contribution of MSMEs in the economy and job generation.
However, despite MSMEs comprising 97 percent of enterprises in APEC and with employment share ranging from 50 percent to 80 percent, only 15 percent of MSMEs in the region have access to formal financing institutions, according to Department of Finance (DOF) Undersecretary Gil Beltran.
Beltran said APEC has yet to set growth targets for MSMEs having access to formal financial services.
“We are more interested in getting the informal lenders like the NGOs (non-government organizations) and the cooperatives to be part of our statistics before we start formulating targets,” he added.
The DOF official mentioned that in the case of the Philippines, nine million out of the 10 million micro-credit borrowers are being provided by non-banks.
“So it’s really the non-banks that providing the financing,” he said.
“Of course the big banks started to provide wholesale loans to microfinance providers so there’s now a link of what we used to call informal sector and big formal sector which is a good development,” Beltran added.