In a bid to improve its financial services in Southeast Asia, the Bank of Tokyo-Mitsubishi (BTMU) entered into a partnership with a fintech company. The agreement is with iAPPS, a mobile app platform that will help the banks to facilitate the cross-border funding and the transfer of money with a particular target on agriculture, manufacturing, and retail supply chains. The bank is planning on a crowdfunded microfinance for the supply chain involving the ecosystem of traders and smallholders. According to Shue Heng Yip, head of digital transformation for Asia and Oceania at BTMU’s parent group, the bank is looking to facilitate the sustainable farming practices and also market reach for developing areas in Asean. Previous hopes were that improvements in technology would result in a narrowing in the trade finance gap in traditionally underbanked regions.
According to the respondents, trade digitization could facilitate mobilization of micro SME (MSME) financing, but the market gap was yet to be reduced. Fintech will have a requirement to deliver enhanced capability for financial institutions for conducting due diligence MSMEs before playing a role in the reduction of gaps. A portion of MUFG’s digital strategy will be used in technology to narrow the barriers to the entry of small business entry markets in Southeast Asia.