Inclusive Business in Financing by Asian Development Bank;

Author:Asian Development Bank;
Language: eng
Format: epub
Publisher: Asian Development Bank Institute
Published: 2018-08-15T00:00:00+00:00

C. Conclusion

The scale at which financial institutions can provide capital to IBs is unparalleled. Dwarfing the fund modality, it makes financial institutions particularly important actors in the provision of IB financing. The case studies in this section suggest that a rigorously commercial approach to BOP incumbents and MSMEs is critical to the viability of inclusive financial products serving them. Although financial institution lending volumes do not afford high-touch customer engagement, vital skills and learning are still transmitted through the relationship, such as financial literacy, a savings culture, cash management, and disciplined repayment. This helps establish foundations for commercial viability, regardless of the size of the commercial endeavor. Importantly, it also confers greater livelihood security. At larger loan size levels, financial institutions find themselves at the center of supply and value chain-building opportunities. These can be unlocked if small-scale, inclusive nodes of entrepreneurial activity are formalized, and if they are considered as business clusters whose aggregate, robust relationships with offtakers allow for creativity in product design and collateral assessment.

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