MSME Development Requires Database Strengthening Support

Jakarta, 5 February 2022 – MSME database strengthening becomes one of the keys to develop financial products and services easily accessible to MSMEs. It will strengthen MSME sector and increase financial inclusion because financial product and service options are open for MSMES. This topic arises in the 1st Plenary Meeting of Global Partnership for Financial Inclusion (GPFI) held virtually by G20 Presidency of Indonesia on the finance track (Bank Indonesia and Ministry of Finance) on 3-4February 2022. This meeting discusses the Priority Agenda of G20 Presidency of Indonesia 2022, primarily related to the role of digitalization in order to increase financial inclusion and MSME development. Indonesia, in joint presidency with Italy and Russia who act as co-chairs of GPFI, presides over the meeting.

The agenda of 2022 GPFI focuses on promoting digitalization to support revenue increase of
MSMEs and vulnerable groups and to introduce digital innovations and data harmonization.
During the discussion on MSME financing, a proposal is made for analytical framework of
regulatory diagnostic toolkit for Digital Financial Services. The analytical framework aims to
strengthen MSME access to innovations in digital financial products and services and to
determine the effective strategy to strengthen acquisition of data and information in MSMEs. This meeting also discusses the importance of identification of the most efficient approaches and methods to conduct data harmonization. In general, all GPFI members agree that data harmonization is very vital for development of digital financial inclusion and it is also believed
that it may be expanded to not only G20 members, but also other countries.ta harmonization.

The GPFI meeting also discusses digital financial inclusion and consumer protection to support
financial inclusion. To promote digital financial inclusion, implementation of Framework G20
High Level Principles on Digital Financial Inclusion is expected to be expanded, focusing not only on G20 countries, but also other countries. In addition, discussion also arises on the necessary 10-year review of G20 High-Level Principles on Financial Consumer Protection.

GPFI work program under the G20 Presidency of Indonesia 2022 is in line with G20 Financial
Inclusion Action Plan 2020 which includes four key deliverables, namely (i) implementation of
2016 High Level Principles on Digital Financial Inclusion, (i) stocktaking report on financial
products and services for MSMEs in addition to loan products, (ili) regulatory diagnostic toolkit
to strengthen access of MSMEs to innovations in digital financial services, and (iv) harmonization of MSME data.***

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