By Dr Hazik Mohamed

COVID-19 is putting millions of SMEs in Asia in jeopardy, reports the World Economic Forum (WEF). For most companies, the pandemic lockdown measures have come quickly and as their employees adjust to working from home and social distancing, there are people who resist or are slow to adapt to the new normal.

At the beginning of the pandemic, non-essential services struggled to improve their remote capacity to allow employees to work safely from home. Commercial bankers and trade financiers had to wrestle with an extra level of complexity: helping large multinational corporations and their vendors within the supply chain to adapt to the massive disruption caused by the COVID-19 crisis. Governments and corporations had to ensure the seamless flow of goods, services and payments to cope with infection positive-tests, post-travel quarantine orders and work-from-home measures.


Online businesses have been impacted less (or even grown in some sectors) as compared to traditional physical retail establishments which are heavily impacted by restricted movement orders and stay-at-home advisories. E-commerce have eased the transactions between businesses, such as a manufacturer and a wholesaler (business to business or B2B), and enabled wider reach between businesses and new customers (B2C), even beyond borders. Although B2C e-commerce tends to receive significant attention, B2B transactions actually exceed B2C transactions.

In the current lockdowns, e-commerce has enabled businesses to continue as logistics and delivery services are regarded as essential services that cannot stop. Firms that have relied on traditional non-digital commerce become stalled and are unable to operate in quarantined conditions. Even without the pandemic restrictions, firms that have embraced e-commerce have higher productivity and have generated a larger share of their revenues from exports than other firms. Moving forward, besides expanded markets and reach, businesses with e-commerce and mobile accessible platforms will be better off and pandemic-ready.

Another area is Internet of Things (IoT)–enabled contactless payments, such as connected cars that allow consumers to pay for gas or food without handling cash or other potentially infected surfaces. In fact, it is possible that COVID-19 will accelerate the adoption of IoT-enabled contactless payments or transactions.


During the global lockdown, SMEs needed financial technology (fintech) to keep business operations going. Fintech companies also provided an intrinsic relief to business owners that were at risk of getting sick by continuing to operate manually. It was not simply the delivery convenience that brought technology into the limelight but that it simply eliminated the risk of COVID-19 exposure for many people.

Since many fintech firms are start-ups, their grit and agility to pivot their operations to provide specialized services as customers needed them strengthened the industry. Banking, digital payments and loan-financing services greatly propelled the economic wheel forward throughout the lockdown. Apps provided by a few innovative banks and digital payments companies were integral to keeping monetary activities moving and helping balance supply and demand. Previously known as a business disruptor, fintech is instead here to stay as an innovative means for business continuity for many SMEs. They are able to adept at harnessing and analyzing various types of data—for example, credit and life insurance underwriting data. Unburdened by complex, disparate, legacy systems, fintech’s structural flexibility allows them to build platforms using a cloud-native approach that takes advantage of the application program interface (API) ecosystem, which is focused on a seamless and delightful digital customer experience.

They are doing their part to provide relief to individuals and businesses coping with the effects of COVID-19 in some of the following ways:

  • Paymaya, one of the Philippines’ online payment firms, used its platform to provide a way for people to contribute to the front-liners of the pandemic in a seamless and efficient manner.
  • Razer has partnered with the Singapore Fintech Association (SFA) to provide fintech companies in Singapore bridge financing, equity or equity-linked instruments ranging from US$100,000 to US$1.5 million (S$143,000 to S$2.1 million).
  • Malaysian telecommunication conglomerate Axiata Group, alongside its subsidiaries edotco and Axiata Digital have launched a RM 150 million cash fund to provide financial assistance to micro, small and medium-sized enterprises (SMEs).
  • Catapa, an Indonesian platform has introduced a package called Catapa at Home that includes various services, that assists freelancers and human resource agencies in managing their accounting, taxes, and invoices, is providing free temporary access to its new customers for 6 months.
  • Mumbai-based startup Riskcovry has launched an innovative insurance in-a-box solution for COVID-19, targeting businesses that want to offer hospitalization and lost wages coverage.
  • Money Forward Synca has started the online matching service in Japan between venture capital firms and startups, with more than 20 venture capital firms joining the remote campaign.
  • Airwallex, a Hong Kong-headquartered fintech unicorn specialized in cross-border payments, is waiving international fees for Australian and UK small businesses.
  • Horangi Cyber Security, a Singaporean startup, is providing its cybersecurity training solutions for free for six months.
  • Xebra, an Indian business financial suite for SMEs operating in the B2B space, is offering a Free Forever plan for startups to help them better manage their resources in these tough times.

Looking forward into the uncertain months ahead post-lockdown, many small businesses without financial muscle to sustain them will likely face tough times as governemnt ease stimulus packages. Here, fintechs can play a critical supporting role, and many are innovating to create new products that address the rapidly evolving economic environment, for example;

  • Ant Financial, the financial affiliate of Chinese e-commerce giant Alibaba, has launched the No-Contact Micro Loan campaign jointly with its digital banking affiliate MYbank, allowing merchants using the Alipay platform to apply for loans; reduced interest rates; and Contactless Loans to support 10 million SMEs, individual businesses and farmers through digital transformation.
  • Alodokter and Halodoc of Indonesia help citizens in remote rural areas, far from quality health care, get preliminary COVID-19 diagnosis and next-step advice as telemedicine grows.
  • Indonesia-based health care startup NalaGenetics has introduced an online platform that uses genetic testing to reduce adverse drug reactions and increase prescription efficacy, improving health care providers’ ability to treat COVID-19.
  • WeSure, WeChat’s insurance arm, is offering a suite of products, accessible within the WeChat Pay mobile platform, that covers those affected by the COVID-19.

It may have taken time for many to shift to digital financing as individuals tend to repel complexities and choose to remain with familiar processes, but fintech has proven why it will continue to play a big role in strengthening and rebuilding our global economy. There is not many industries that can ensure strict social distancing while providing fast, convenient and secure transactions online or remotely.


Asia’s tech startup scene may be young but it is dynamic. Asia is home to more than one-third (119) of the world’s 331 ‘unicorns’ (startups valued at more than US$1b) — 91 of these companies are based in China, followed by 13 in India, six in South Korea and four in Indonesia. By 2040, Asia is projected to top 50% of global GDP and drive 40% of the world’s consumption. Half of global consumption growth is also projected to be in Asia, fuelled by the growing Asian middle class, which is set to hit 3 billion.

Korean startups are expanding new business models and digital solutions domestically amid the pandemic, and are now setting their sights to scale abroad. South-east Asia’s first Korean startup centre was officially opened in Singapore on 8th July 2020, with a focus on fintech and cybersecurity. The centre was launched by South Korea’s Ministry of SMEs and Startups (MSS) and supported by Enterprise Singapore (ESG), will be a channel for Korean SMEs and startups to plug into the region’s innovation ecosystem.

Similarly, investments in Southeast Asian startups jumped in the April-June quarter despite headwinds from the coronavirus pandemic, led by e-commerce and fintech companies that gained momentum as COVID-19 reshapes home and the workplace. The Thai government, for example, is working on an ambitious plan to transform the country into the next global hub for startups by addressing legislative loopholes and ensuring easier access to funds. In Indonesia, the government has launched a “10,000 startups initiative” to provide financial, technology and marketing support to emerging startups.

Despite the pessimism surrounding COVID-19, some financiers in Asia are still looking to invest in startups hit by the pandemic. Many people seem to view the pandemic as a driving force for innovation. Governments across the world are using technology and startups to contain COVID-19. It is timely that governments also offer multi-dimensional assistance packages for startups to sustain themselves, and remain optimistic through devising strategies for the ‘new normal’ post-COVID-19.


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