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Scaling-Up SME Access to Financial ServicesSmall and Medium Enterprises (SMEs) play a major role in economic development, particularly in emerging countries, but access to finance remains a key constraint to SME. In the light of the new understanding of the SME finance challenges that this report synthesizes, the Financial Inclusion Experts Group (FIEG) makes key recommendations for the G-20 leaders, in order to achieve a global scale-up of SME access to financial services in the developing world. The G-20 FIEG SME Finance Sub-Group executed a global SME Finance stocktaking exercise with various SME finance models to establish best practices in SME Finance.The report concludes that, given the fragmented SME finance data space, the G-20 has a unique opportunity to lead the collaborative effort on improving the availability and quality of SME finance data globally. This can be achieved through encouraging and coordinating the data collection efforts at regional, national, and global levels conducted by a multitude of sources including national governments/agencies and international organizations and effectively addressing the data collection challenges along the way to ensure continuity of these efforts moving forward.
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Scaling-Up SME Access to Financial Services in the Developing WorldSmall and medium enterprises (SMEs) play a major role in economic development, particularly in emerging countries. Access to finance remains a key constraint to SME development in emerging economies. Closing the credit gap for formal SMEs will be less daunting than for informal SMEs. The SME finance gap is the result of a mismatch between the needs of the small firms and the supply of financial services, which typically are easier for larger firms to access. Deficiencies in the enabling environment and residual market failures have motivated government interventions to foster SME access to financing. The stocktaking exercise confirms the rise in various parts of the world of specific business models aimed at providing financial services to SMEs in a cost-effective manner. Effective SME financing models can be implemented in different country and market environments, but greater outreach is achieved in the most developed environments for the financial sector. Although SME banking and microfinance models are successfully being rolled out in an increasing number of countries and regions, equity financing remains a challenge in developing economies. The role of international finance institutions (IFIs) and development finance institutions (DFIs) to foster SME financing in the developing world has been significant so far. Increasing access to finance can only be successful if qualitative aspects are taken into account.
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Access to Finance in Output-Based AidOutput-Based Aid (OBA) and other
 results-based financing mechanisms are gaining popularity in
 the development context for many reasons, in particular, the
 desire to link scarce public funding with actual results on
 the ground. But withholding disbursements until the delivery
 of 'results' or 'outputs' requires that
 the service providers delivering the results must have
 access to finance (A2F) to pay for the 'inputs' in
 the first place. Such finance is not always available or
 affordable. The purpose of this working paper is to outline
 some of the key issues related to OBA and A2F. The analysis
 focuses on the energy, water, and health sectors. Micro,
 small and medium enterprise (MSME) financing is the main
 topic; however, OBA is ultimately about poor households
 affording access to basic services, and many OBA schemes
 attempt to address A2F for households, so some of these
 innovations are also described. The working paper is
 expected to support a consultative process between experts
 dealing with A2F challenges and experts on OBA. This process
 should help raise awareness of the OBA approach among
 potential financiers, and help consider solutions
 (instruments, partnerships, capacity building) so that OBA
 and other similar results-based financing mechanisms can be
 brought to scale and integrated into broader sector policy,
 where appropriate.