Digitization, opening up supply chain key in boosting MSMEs, say legislators

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Prime Minister Dato Sri Najib Tun Razak (4nd left) poses for a group photo with former presdient Gloria Macapagal Arroyo (center) and some of the leaders of the ASEAN Business Advisory Council (ABAC) during the Prosperity for All Summit 2017 at the City of Dreams, Manila. Fernando Sepe, Jr. ABS-CBN News

MANILA – Legislators and long-time advocates of micro, small and medium enterprises on Friday called for innovative approaches towards raising the sector as a driver of inclusive growth, including tapping digital technology to expand market access and promoting enhanced supply chain linkages. 

At the opening session of the Prosperity for All Summit, former President and now Pampanga Representative Gloria Arroyo led the call for using digital technology as an engine to bolster MSMEs, citing, for instance, online order and payment mechanisms for small entrepreneurs.

She said digitization was crucial in both the trade and services sector, citing businesses based on mobile applications such as transportation service Uber and Air BnB, an online marketplace for hotels, apartments and other accommodations.

“We have to bring them to the world of digital technology. Because payments are easier- think PayPal. And it is easier to place orders through email,” said Arroyo, appearing at her first international engagement since her release from jail in July last year.

“Digital technology is key to making trade world-class rather than ‘mom and pop’,” she told her audience, an assembly of Southeast Asian business leaders, government officials and other private sector representatives.

Showing her policy flair, Arroyo, an economist, called on Association of Southeast Asian Nations members to invest in developing digital, and not just physical, infrastructure.

She recalled how her administration had initiated efforts to boost the MSME sector, citing Go Negosyo, the country’s entrepreneurship center.

Senator Bam Aquino meanwhile pushed for “3 Ms” that he believes would help push the MSME sector forward: money, mentorship and market.

“We need the 3 Ms to create that enabling environment for them to be able to succeed and to be able to grow,” Aquino said at the session.

He called on banks to offer MSMEs better interest rates and other ways of making loans more accessible, such as collateral, non-collateralized “or even guarantee programs.”

On mentorship, he cited ongoing programs of the government to hand-hold those engaged in MSMEs.

Aquino then emphasized the need to connect MSMEs to an expanded market.

“A lot of our MSMEs, a lot of our ​m​​icro and ​s​​mall [businesses] do have good products, they do have a lot of potential but they aren’t able to access markets,” said the lawmaker.

He noted the existing support of state-run trade fairs, but underscored a potential in improving supply chain links: encouraging big businesses to get small ones as suppliers.

“The classic example of this, of course, is Jollibee where they opened up their produce to local farmers. And that’s a 10-year program already, which a lot of the companies here I think can get into,” he said of the country’s largest fast food chain.

“If we can do that within our country and eventually across the ASEAN, where your larger companies are able to get supply from smaller companies or even micro businesses supplying to small and medium, not just within the province or within the region but across the ASEAN, I think we’re really creating an infrastructure where prosperity can be spread for all,” he said.

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