In an effort to address supply chain interruptions throughout Asia caused by COVID-19, Mastercard said Tuesday that it has partnered with the Asian Development Bank to develop technology to increase wholesalers’ access to credit and improve overall efficiency in the region.
Working with fintech partners N-Frnds, SGeBIZ and Finastra, the U.S.-based credit card issuer will seek to help accelerate the shift toward the digitization of supply chains in order to benefit small businesses.
London-based Finastra provides clients with services that include retail banking, lending, and payments systems, as well as cloud computing platforms. SGeBIZ, headquartered in Singapore, is focused on providing procurement and payment sourcing on a single platform. N-Frnd offers a multiproduct distribution network for small-business owners and has offices in Singapore and Rwanda.
The partnership will provide small-business owners greater wholesaler access to credit through Finastra’s Trade Bank, which allows for faster data processing that can assess creditworthiness quickly. It will also allow for digitized marketing campaigns for retailers through N-Frnds’ mobile platform, which enables small-business owners to communicate promotional efforts with their suppliers.
The Philippines-headquartered Asian Development Bank said that even pre-pandemic, a funding gap of some $1.5 trillion existed in 2018, which primarily impacted small businesses. It added that the International Chamber of Commerce estimated a potential shortfall of up to $5 trillion in trade financing through 2021, largely exacerbated by the pandemic.
“COVID-19 has had an adverse impact on the global supply chain and these collaborative solutions are critical to enduring grocery stores stay stocked, pharmacies have access to medicines and people can buy the daily goods they need,” said Safdar Khan, divisional president, Southeast Asia emerging markets at Mastercard.
Mastercard said the new program with the Asian Development Bank will begin in Indonesia with 500 retailers, with a goal of having 5,000 merchants on the platform by the end of the first quarter of 2021. This folds into the company’s larger commitment to have 1 billion individuals and 50 million small businesses as part of the digital economy, a goal that has been brought into greater focus in light of the pandemic.
“These unprecedented times underscore the importance of building an inclusive, sustainable digital economy, including through the application of technology to digitize trade, which can make it easier for the small and medium-sized businesses to participate in global supply chains,” said Michael Froman, vice-chairman and president, strategic growth for Mastercard. “Innovative partnerships like this one can support the agility and resilience of supply chains, accelerating access to finance and improving efficiency.”
The partnership with Mastercard on digitizing the region’s supply chain will help to “alleviate the impact” that the pandemic has had so far and maintain access to essential goods and services, said Ahmed Saeed, vice president for East Asia, Southeast Asia and the Pacific at the Asian Development Bank.
“Our partnership with Mastercard and its alliance partners in the pilot digital supply chain project will provide critical access to finance to affected [micro, small and medium-sized enterprises] and immediate assistance to help keep the food and essential goods supply chain running,” Saeed said.