JUNEASIA BUSINESS OUTLOOK19solutions but also actively lead the shift in commercial practices by promoting the benefits of fintech-based transactions. This transformation requires a proactive mindset, where companies embrace the role of change agents, encouraging broader acceptance of digital financial ecosystems. By doing so, fintech players can contribute to modernizing business practices and fostering a more efficient, transparent, and inclusive financial landscape in Thailand and other emerging markets.Overreliance on a single funding source makes emerging markets vulnerable to economic shocks. What strategies can emerging economies adopt to diversify their financial resources and reduce dependence on external capital flows?To reduce dependence on external capital flows, emerging economies must adopt a diversified approach to financial resource mobilization. Key strategies include:Strengthening Domestic Capital Markets: Developing robust local bond and equity markets can enhance liquidity and reduce reliance on foreign investment.Promoting Financial Inclusion and Digital Payments: Expanding access to local financial services reduces dependency on volatile external funding.Stimulating Domestic Demand and Industrial Development: A key aspect of financial resilience is fostering a strong domestic market that can sustain economic growth even amid global uncertainties. By implementing policies that enhance consumer purchasing power and support local businesses, governments can drive internal demand, reducing reliance on foreign markets.Supporting small and medium-sized enterprises (SMEs) through targeted financial programs can enhance local production capacity and job creation. Investing in infrastructure projects that boost domestic industries such as manufacturing, agriculture, and technology can generate sustainable economic growth. Encouraging innovation and technological advancement in key sectors can strengthen self-sufficiency and global competitiveness.By focusing on these strategies, emerging economies can build a more robust and diversified financial system that mitigates external shocks while fostering sustainable, long-term growth.Disruptions to supply chains are a common challenge in emerging markets. What strategies can businesses implement to build more resilient and adaptive supply chains that can withstand unexpected shocks while maintaining financial stability?To mitigate supply chain disruptions while maintaining financial stability, businesses in emerging markets should adopt the following strategies:Diversification of Suppliers and Logistics: Reducing dependence on a single supplier or transportation route enhances flexibility in times of crisis.Investment in Digital Supply Chain Technologies: AI, blockchain, and IoT improve supply chain visibility and efficiency, reducing operational risks.Strengthening Local and Regional Sourcing: Developing domestic production capabilities decreases reliance on global supply chains.Building Financial Resilience: Hedging against currency fluctuations, securing trade finance, and maintaining liquidity buffers ensure financial stability during disruptions.Implementing Agile Supply Chain Management: Adopting just-in-case inventory models alongside just-in-time systems helps balance efficiency with resilience.A pertinent example is the motorcycle financing industry in Thailand. During the COVID-19 pandemic, semiconductor shortages led to significant disruptions in motorcycle production, causing a supply-demand imbalance. This posed a challenge for financial institutions engaged in hire-purchase (HP) financing, as vehicle supply constraints affected the availability of new motorcycles for financing.However, an unintended consequence of this supply disruption was a surge in demand for used motorcycles at auctions. HP financing companies primarily manage repossessed vehicles from customers who default on payments, and in normal circumstances, maintaining and liquidating these assets efficiently is a key operational concern. Yet, due to the constrained supply of new motorcycles, the demand for repossessed vehicles in the secondary market remained strong, preventing major financial losses and stabilizing portfolio performance.By prioritizing adaptability and strategic planning, businesses can create supply chains that withstand unexpected shocks while sustaining growth in emerging markets. Fintech plays a crucial role in addressing the challenges faced by the unbanked population, who often resort to informal or illegal lending channels due to a lack of access to formal financial services
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