Two days ago, the world celebrated MSME Day, an important occasion to recognize the significant contributions of micro, small, and medium-sized enterprises (MSMEs) in the Philippines. These MSMEs make up over 99 percent of business establishments and employ about 63 percent of the workforce, playing a critical role in driving the Philippine economy. Addressing the challenges faced by MSMEs is crucial to unlocking the country’s growth potential.
I have come to learn that MSMEs have various pathways to success, and online platforms like Grab can significantly enhance their competitiveness and productivity. Through interactions with our MSME partners, we have realized that having an online presence elevates the profile of enterprises and expands their market reach. By participating in a larger playing field powered by technology, many MSMEs can innovate, improve their products, and scale their services and operations. It is truly rewarding to witness enterprises graduate from micro to small, small to medium, and gain prominence in the food and retail sectors. Additionally, it is worth noting that many MSMEs are inspired to contribute to sustainability and community development.
The challenge we have set for ourselves is to explore how Grab can enable more MSMEs to thrive online. There are several common challenges identified by the Tech for Good Institute (TFGI), such as poor internet infrastructure, low digital and financial literacy, and rural-urban divides. Furthermore, MSMEs face a persistent financing gap. By understanding the pain points and growth opportunities of our MSME partners, we can focus on specific areas and develop assistance programs to address their needs. We foster an environment of active participation through chat groups, regular consultative business reviews, and town halls, allowing our MSME partners to shape Grab’s services according to their requirements. As a result, our merchant app has evolved to provide tailored support for small businesses where they need it the most.
One notable initiative is Indie Eats, a program that provides visibility and demand generation support for new and emerging merchants on GrabFood. We believe in involving our stakeholders, and I have witnessed firsthand the positive impacts of this collaborative approach. For example, during our recent GrabNext Conference, an annual knowledge-sharing event with our merchant partners, I had the opportunity to meet entrepreneurs whose businesses thrived even during the pandemic, thanks to the viability of our online marketplace. It is heartening to hear how our quick loans program served as a lifeline for an MSME partner in a time of need, or how a micro-enterprise tripled their sales by utilizing online advertising and data analysis on our platform.
Partnerships with national agencies and city governments have also played a crucial role in implementing our plans for MSMEs. Business organizations like the Makati Business Club have become valuable partners in creating more livelihood opportunities and expanding the knowledge of MSME suppliers, particularly in areas of evolving environmental and governance standards.
I would also like to highlight the strength and resilience of Filipino women entrepreneurs, who reportedly own 45 percent of MSMEs in the country. Many of these women are engaged in online businesses while balancing family care responsibilities. It is essential to recognize the challenges that disproportionately affect them. For instance, the Bangko Sentral ng Pilipinas revealed that 58 percent of women-owned MSMEs cited a lack of access to funding, compared to 37 percent of male-owned businesses. This underscores the importance of tailor-fit financial products and services to meet their specific needs. Additionally, a TFGI study suggests that affordable childcare services can help women entrepreneurs balance their dual roles. Initiating public conversations and education campaigns to address the gender-based division of family work, including childcare, is necessary to create a more equitable environment.
MSMEs are undeniably the backbone of the Philippine economy, yet they face daily uphill battles. Rethinking business models, fostering public-private initiatives, and implementing ease-of-doing-business rules are essential steps in alleviating the burdens faced by MSMEs. By showing our appreciation and support for Philippine MSMEs, I am optimistic that we are on the right track to empower these enterprises and fuel the growth of our nation.
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