Developing Asia can adopt integrated policies to harness digital transformation as digital technologies empower small and medium-sized enterprises (SMEs), offering significant opportunities to promote inclusion, resilience and sustainability, according to a report by the Asian Development Bank (ADB).

The report, “Asian Development Policy Report 2025: Harnessing Digital Transformation for Good,” said digital technologies enable SMEs by improving the delivery of key services such as finance, overcoming conventional barriers and increasing resilience.

“For instance, financial technology and platforms improve SMEs’ access to finance and business networking. Digital payments, in particular, have gained significant penetration among underbanked groups,” the report said.

Unbanked, underbanked

It added that around 66 percent of digital lending customers in Southeast Asia are unbanked or underbanked. Moreover, digital technologies expand SMEs’ access to both domestic and foreign markets, reduce transaction costs and improve process efficiency.

The report also said advances in digital technologies have the potential to promote inclusion in the region by removing constraints and fostering innovative and scaled solutions to facilitate entrepreneurship and business creation and lower barriers and costs, enabling small firms to engage in trade and expand internationally.