Says financial inclusion and support is crucial to empower MSMEs.
In today’s dynamic business landscape, Micro, Small, and Medium Enterprises (MSMEs) stand as the backbone of the economy, yet they face untapped potential because of less access to financing opportunities. Recognizing this crucial need, online platforms like foodpanda are not only focusing on digital inclusion but also prioritizing financial empowerment to support these enterprises.
With the importance of financial inclusion for its MSME partner vendors in mind, foodpanda forged a strategic partnership with BDO Network Bank (BDONB), the community banking arm of BDO Unibank, to offer financing and business expansion sessions to their small partner merchants.
According to Carlo Brillantes, foodpanda Philippines’ Head of Digital Payments, digital inclusion has been vital in enabling MSMEs to grow but he believes the journey continues. “Financial inclusion emerges as the next frontier in empowering these enterprises so they can expand further.”
foodpanda partners with over 30,000 small businesses, including mom-and-pop stores, online businesses, and new startups, making up 76% of its partner vendor network. In parallel, MSMEs comprise 99.58% of all businesses in the country based on the latest data from the Philippine Statistics Authority (PSA).
This is the reason why the current administration strongly prioritizes supporting this sector. One main focus of this priority plan, besides digitization, is financing. Last year, the World Bank approved a $600 million loan to the Philippines to help enhance financial inclusion for MSMEs.
Negosyo Like a Panda Loans Caravan
foodpanda and BDONB’s alliance aims to offer free loan consultations and exclusive discounted interest rates to foodpanda’s partner vendors who are small businesses or startups, facilitating their access to loans and other financing opportunities.
“For it to be an inclusive project, we aim to visit our partner vendors from every corner of the country – from North to South Luzon, Visayas and Mindanao,” said Brillantes. “foodpanda and BDONB’s partnership signifies a joint effort to close financial gaps, providing these small businesses with financial tools and guidance necessary for their sustainability and expansion.”
The Negosyo Like a Panda Loans Caravan is foodpanda’s initiative to offer financing options to its MSME partner vendors by partnering with local banks. The program will visit different areas nationwide to offer free loan consultations and exclusive discounted interest rates, starting with its partnership with BDONB.
foodpanda and BDO Network Bank share the same mission of helping MSMEs understand the value of good borrowing, which often is an overlooked aspect in obtaining financing. Comprehensive loan consultations guide MSMEs on prudent borrowing, empowering them to manage funds effectively. This fosters responsible financial behavior and cultivates crucial financial expertise for sustained growth.
A recent report by the Asian Development Bank revealed that the proportion of credit given to MSMEs by banks has decreased since 2013. This is below the required 10% threshold set by Republic Act 6977, or the Magna Carta for MSMEs, which mandates banks to allocate 8% of their total loans to micro and small enterprises, and 2% to medium enterprises.
Deeply rooted in their commitment to empowering individuals, businesses, and communities with relevant banking solutions, BDONB has engaged in various on-the-ground banking activities to support MSMEs. A recent example of this commitment is the partnership with foodpanda.
Collaborations between platforms like foodpanda and established institutions like BDONB emphasize that the journey toward empowering MSMEs involves providing avenues for digital expansion and nurturing their financial health. “Our partnership highlights the transformative impact of collaboration in championing financial inclusion and fostering MSME growth, contributing to a more robust and inclusive economy,” Brillantes explained.
According to the two partners, The Negosyo Like a Panda Loans Caravan with BDONB is set to visit more areas in the coming months to provide loan options and fruitful discussions on how to expand their businesses through financing.