CASTER Scoping Study

The COVID-19 pandemic has disproportionately affected micro, small, and medium enterprises and the microfinance institutions serving them. Project CASTER (Collective Action Secretariat Towards Enhancing Resilience for MSMEs and MFIs), supported by FSG and RestartME (a Philippines-based NGO focused on micro-finance and MSME support), aims to convene government, private sector, and development institutions towards a clear common agenda that will catalyze collective impact-based action to assist MSMEs and MFIs in post-pandemic recovery.

This CASTER Scoping Study is a first step in the process. The study focused on: (i) mapping the existing literature and conducting ecosystem stakeholder outreach to understand the impact of COVID-19 on MSMEs; (ii) identifying opportunities and challenges to MSME recovery and resilience, and (iii) determining collective impact solutions to be implemented at an ecosystem level. The research specifically focused on MSMEs in the wholesale and retail trade and food service sectors, which collectively comprise around 60% of registered MSMEs in the Philippines.

Top Takeaways

1. The study identified five key recovery and resilience-linked challenges: (i) slow recovery and shift in nature of consumer demand, (ii) inadequate access to financial products, (iii) infrastructure and capability barriers to expanding digitalization, (iv) continued disruption of supply chain and operations, and (v) lack of simple resilience and risk management tools at the firm and ecosystem levels.
2. Two areas of opportunity related to digital adoption were identified: (i) accelerated adoption of e-commerce platforms and (ii) expanded usage of digital payments.
3. Five ecosystem-level collective impact solution themes were identified to address the challenges and capitalize on opportunities: (i) supporting MSMEs’ pivot to resilient, sustainable business models, (ii) recovery and resilience financing innovations, (iii) removing barriers to scaling up digital adoption, (iv) innovations to build resilient (last-mile) supply chains, and (v) common MSME resilience metrics, scorecard, and tracking mechanisms.
4. In the next phase, FSG and RestartME are working with ecosystem stakeholders to conduct advocacy and facilitate the establishment of collective impact initiatives structured around the five identified solution themes.

This study was funded by BPI Foundation and BPI Direct BanKo (the micro-finance arm of BPI)