ravi menon : fostering digital, financial, and green inclusion for msmes remarks by mr ravi menon, managing director of the monetary authority of singapore, at the interactive dialogue at the executive board of undp, unfpa and unops ( second regular session 2023 ), singapore, 30 august 2023. * * * mr president, administrator, honourable ministers, excellencies, ladies and gentlemen, good morning. thank you for having me here today. micro, small, and medium sized enterprises, or msmes, are the building blocks of every economy. they hold our social fabric together. globally, msmes account for 50 % of economic output and 70 % of employment. uplifting msmes must therefore be a key component of any country's strategies to promote economic growth and social development. the great potential of msmes is that can be nimble and adaptive – critical success factors in an economic landscape characterised by continuous change. but they face three constraints – lack of scale, lack of connectivity, and lack of financing. there is not much we can do for scale ; in fact, if they grow in scale, they will cease to be msmes. our strategy must be to enhance their connectivity and access to financing so that their lack of scale becomes much less of a constraint. an effective way to do this would be through the provision of global public goods. as the global economy becomes increasingly digital and green, the sources of comparative advantage will shift, presenting new opportunities for msmes to overcome their traditional constraints of scale and thrive and grow. here in singapore, the public and private sectors are working together to build some of this digital infrastructure to help our msmes overcome their traditional constraints and build new capabilities. as the central bank and integrated financial regulator, the monetary authority of singapore ( mas ) plays an important role in this effort. we have taken the approach of systematically building what we call foundational digital infrastructures which are available to all participants in the digital economy – from large multinational firms to msmes to individuals. there are three foundational digital infrastructures. first, a digital identity to establish confidence, transparency, and trust at both ends of a digital transaction. in singapore, this is provided by singpass for individuals and corppass – or a unique entity number - for businesses including msmes. 1 / 5 bis - central bankers'speeches second, trusted data that can be shared and used for digital transactions through a robust consent framework. in singapore, this is called myin

##fo business. it is a national platform allowing firms, including msmes, one - stop access to entity - level data residing across various government agencies. firms can conveniently permit sharing of these datasets with third party services via open apis. third, an electronic payment rail that enables interoperability across payment solutions and seamless fund transfers. in singapore, the paynow infrastructure allows individuals and businesses to move money to one another's bank accounts on their mobile phones in real - time, 24 / 7. msmes have benefitted from this by being able to send and receive payments in a timely, affordable and secure manner using mobile numbers, company registration numbers, national id, or qr codes. but to maximise opportunities for msmes, digital infrastructure within one's borders is not enough. we need cross - border digital connectivity and digital public goods. this is where mas'collaboration with undp comes in. by working with the undp, we are helping not just msmes in singapore but connecting and supporting msmes worldwide. mas'collaboration with undp spans across three key themes. first, building digital trust for msmes second, expanding msmes'access to financial, trade, and green resources third, enhancing training for msmes. let me start with building digital trust for msmes. in a global, digital economy, msmes must be able to engender trust in larger businesses that they are typically suppliers to and financial institutions whose services they require. the traditional model whereby trust is established in msmes through the provision of collateral is inefficient, costly, and clearly inadequate. if the unique identity and credentials of an msme can be verified, then trust can be established, enabling more economically efficient relationships. we must first try to solve for how msmes can be recognised by any financial institution worldwide. we can do this by leveraging on unique legal entity identifiers or lei for each msme. the leis are issued under the auspices of the global legal entity identifier foundation or gleif. 2 / 5 bis - central bankers'speeches gleif is an international organisation set up by the g20 financial stability board, to issue leis as a lynchpin for financial transactions to be accurately attributed to verified entities. mas, undp, and gleif are exploring the issuance of msme leis at scale at affordable rates under a new structure. this would be a major step forward as leis are