MAS and UNDP launch Universal Trusted Credentials initiative to improve MSMEs’ access to funding

29 November 2023

On 14 November 2023, the Monetary Authority of Singapore (“MAS”) and the United Nations Development Programme (UNDP) announced the launch of the Universal Trusted Credentials (“UTC”), an open global initiative aimed at improving micro, small and medium-sized enterprises’ (“MSMEs”) access to financing.

The UTC initiative was launched in partnership with Bank of Ghana, Global Legal Entity Identifier Foundation and the SME Finance Forum.

Globally, MSMEs face significant challenges in accessing affordable finance to grow their businesses, particularly when they pursue cross-border opportunities which require them to navigate different regulatory frameworks, financial systems and lending norms.

The UTC initiative proposes a framework for the creation of trusted credentials that characterise an MSME’s financing worthiness based on traditional and alternative data sets:

  • Source data: Information about an entity may be verified from a variety of sources such as utility providers, trade platforms and the national registry to include data on trade flows, trade concentrations of buyers and suppliers, and active and timely payment of utilities and telco bills.
  • Derived data: Coupled with source data, derived data or additional indicators, such as an MSME’s willingness to upskill itself in financial literary and its past repayment behaviour, help to derive an MSME’s “intent to pay” track record. This gives financial institutions greater confidence that an MSME can be trusted to pay back the small value loans provided.

The UTC initiative will focus on building the capacity of MSMEs and improving access to data and financing through collaborations in key emerging markets. These efforts include:

  • developing an ecosystem of suitable data source providers that would contribute towards the creation of alternative data sets for UTC;
  • enhancing the UTC platform, presently tested in Ghana, to cater for a wider set of alternative data; and
  • developing a common UTC standard to ensure interoperability internationally and to cater for the evolving needs of the industry.

Reference materials

The media release is available on the MAS website www.mas.gov.sg.