Benefits to Region

The COVID-19 pandemic has presented an opportunity to accelerate digitalization and provide affordable financial services. The use of mobile devices has seen rapid growth, particularly in low-income and unbanked communities. The project can leverage this trend and the role of fintech in the post-pandemic economic recovery. However, SMEs in APEC region still are suffering from many obstacles, which need to be lifted. In this regard, the project aims to address several problems related to SMEs in the APEC region.

1)  Slow adoption of digital finance and fintech: Many SMEs are slow to adopt digital finance and fintech solutions due to various barriers, including limited awareness, concerns about security and privacy, and a lack of supporting infrastructure. The project seeks to address these barriers by promoting collaboration, sharing best practices, and facilitating the adoption of digital finance and fintech solutions among SMEs.

2) Policy and regulatory challenges: Inconsistent policies and regulatory frameworks across APEC economies can hinder the development and adoption of digital finance and fintech solutions for SMEs. The aim of this project is to identify policy and regulatory issues and emphasize the need for policy reforms that support the growth of digital finance and fintech in a way that benefits SMEs across various economies in the APEC region.

The project has the potential to bring sustained benefits to more than one economy in the APEC region. By facilitating knowledge exchange, collaboration, and policy reforms, the project can create an enabling environment for SMEs to access digital finance and fintech solutions. These benefits can extend beyond individual economies, as the project aims to share best practices and foster regional cooperation, allowing SMEs from different APEC economies to learn from each other's experiences and adopt successful approaches. Ultimately, the project can contribute to the growth and competitiveness of SMEs across the APEC region.

Eligibility and Fund Priorities

The project is aligned with the founding priorities of APEC Support Fund (ASF) – General Funds established by the Senior Official Meeting (SOM) and ECOTECH Priority Themes to develop and strengthen the dynamism of SMEs.

Develop and Strengthen the Dynamism of Small and Medium Enterprises: Through the project, people from SMEs related fields will share their experiences and have precious opportunities to strengthen their capabilities to develop the businesses further through the innovative finance technology.

Additionally, through networking among APEC SME stakeholders related to this project's theme, there's potential to bridge the knowledge gap in digital finance, facilitating a move towards a more informed and inclusive digital financial landscape.

Capacity Building

Digital finance is a prominent contactless industry that is experiencing significant growth through the expansion of convenient payments and remittances, advancements in authentication technology, and the proliferation of platforms. The introduction of new technologies driven by the Fourth Industrial Revolution and the expansion of online transactions following the COVID-19 pandemic have increased the importance of small and medium-sized enterprises (SMEs) adopting digital financial technology. The project aims to share cases and policies that enhance the knowledge and capabilities of SMEs in the challenging field of electronic financial industry. Through this, SMEs can enhance their understanding of digital finance and acquire practical technologies and know-how that can be applied in real-world settings. Additionally, member economies can collaborate to establish platforms that facilitate the entry of SMEs into new digital financial markets and support their achievements in international competition. APEC member economies can support the education and workforce development of SMEs to cope with the advancement of digital finance and fintech innovation. Through this, SMEs can acquire specialized knowledge and skills and develop proactive business strategies.

Key areas that require attention are 1) Accessibility of Digital Finance Solutions, 2) Adoption of FinTech Solutions, 3) Cybersecurity and Data Privacy, 4) Obstacles in Policy and Regulation, and 5) Financial Literacy and Education Initiatives. These matters need resolution in order for SMEs to embrace fintech innovation as an integral part of organizational processes. In addition, policy directives will be recommended to overcome these challenges.

Moreover, emphasis will be directed towards various practices and implementation strategies, for example, by observing various success stories in digital finance implementation and introducing exemplary SMEs that have skillfully assimilated digital finance solutions, underlining diverse advantages, common difficulties and implemented methodologies.