Scaling-Up SME Access to Financial Services in the Developing World
Author(s)
International Finance CorporationKeywords
RISKY BORROWERSECONOMIC ACTIVITY
CREDIT REGISTRY
LOAN AMOUNT
TECHNICAL ASSISTANCE
PAYMENT DEFAULT
MFI
CREDIT FACILITIES
FIXED ASSETS
INTERNAL FINANCE
BANKING RELATIONSHIP
FINANCIAL INFRASTRUCTURES
CREDIT HISTORIES
LINE OF CREDIT
FINANCIAL LITERACY
FINANCIAL MARKETS
ENTREPRENEUR
FINANCIAL ACCESS
PRIVATE CREDIT
INVESTMENT VEHICLES
PRIVATE EQUITY
FINANCIAL SERVICE
PROFITABILITY
FINANCIAL REGULATION
ECONOMIC POLICY
POLICY DESIGN
VENTURE CAPITAL
JOB CREATION
PARTIAL CREDIT
FINANCIAL INSTRUMENT
DEPOSIT ACCOUNTS
VENTURE CAPITALISTS
DEPOSIT
ENTREPRENEURSHIP FINANCING
BANKING SUPERVISION
COMPLIANCE COSTS
CREDITWORTHINESS
FIXED CAPITAL
BANK LENDING
WORKING CAPITAL
CREDIT REGISTRIES
CREDIT HISTORY
DEPOSITS
FISCAL POLICIES
KEY CHALLENGE
ALTERNATIVE FINANCING
ACCESS TO BANK LOANS
INTEREST RATE CEILINGS
BANK LOAN
SOURCES OF FINANCE
EQUITY CAPITAL
ECONOMIES OF SCALE
SMALL BUSINESS OWNERS
DEBT SECURITIES
ALTERNATIVE INVESTMENT
FINANCIAL INSTRUMENTS
LENDER
SHADOW ECONOMY
INTERNATIONAL FINANCE
OPERATING COSTS
LOAN PORTFOLIO
BUSINESS DEVELOPMENT
MICRO FINANCE INSTITUTION
CAPITAL MARKETS
CREDIT BUREAUS
ACCESS TO FINANCIAL SERVICES
SMALL ENTERPRISE
COMMERCIAL BANKS
BUSINESS EXPERIENCE
COMMERCIAL BANK
INFORMATION INFRASTRUCTURE
EXTERNAL FINANCING
ACCESS TO CREDIT
INCOME GROUP
MICRO ENTERPRISES
FINANCING NEEDS
CREDIT REPORTING
ACCOUNTS RECEIVABLES
FARMERS
MICRO FINANCE
CREDIT RELATIONSHIP
CREDIT BUREAU
ACCESS TO CAPITAL
MULTINATIONAL
PUBLIC FINANCE
BANKRUPTCY
INFORMAL ECONOMY
BUSINESS DEVELOPMENT BANK
ACCESS TO FINANCING
RATES OF RETURNS
FINANCIAL KNOWLEDGE
DEPOSIT RELATIONSHIPS
DEVELOPMENT FINANCE INSTITUTIONS
ECONOMIC DEVELOPMENT
COLLATERAL REQUIREMENTS
FINANCIAL INFRASTRUCTURE
INVESTMENT BANK
CAPITAL STRUCTURE
EQUITY FINANCE
POLICY ENVIRONMENT
GUARANTEE SCHEMES
SPECIAL FINANCING
CASH MANAGEMENT
PROPERTY AS COLLATERAL
FINANCIAL INTERMEDIATION
CREDIT GAP
RISK MITIGATION
SOCIAL DEVELOPMENT
BUSINESS PLANS
FINANCIAL INSTITUTIONS
BUSINESS LENDING
FINANCING FACILITIES
INVESTMENT DECISIONS
CREDIT INFORMATION
CREDIT GUARANTEES
INTEREST RATES
REPOSSESSION
BORROWER
MFIS
BANK CREDIT
INVESTMENT CAPITAL
OVERDRAFTS
GOVERNMENT POLICIES
EQUITY FUNDS
ANGEL INVESTORS
OVERDRAFT
LOAN APPLICATION PROCEDURES
FINANCIAL NEEDS
BANKS
ACCESS TO FINANCE
BANKING SYSTEMS
SMALL BUSINESS
ELIGIBILITY CRITERIA
CASH FLOWS
SMALL ENTERPRISES
OBSTACLES TO GROWTH
PUBLIC CREDIT
CAPITAL FINANCE
RECESSION
FINANCE ACCESS
CASH FLOW
COLLATERAL
GENDER
INFORMAL FINANCE
CREDIT PRODUCTS
FORMS OF CREDIT
RISK MANAGEMENT
DEBT
FINANCIAL REGULATORS
EMPLOYER
BUSINESS ANGEL
UNION
BORROWING
INFORMAL FINANCING
FIXED CAPITAL INVESTMENT
TRADE FINANCING
BANK FINANCING
COMPLIANCE COST
TRADE CREDIT
PROPRIETORSHIPS
LENDERS
ACCESS INDICATORS
CREDITOR
CREDIT CRUNCHES
FIXED COSTS
MANAGEMENT EDUCATION
CAPACITY BUILDING
INTEREST RATE
EXTERNAL FINANCE
CREDIT REPORTS
FINANCIAL PRODUCT
EMPLOYMENT GROWTH
CAPITAL FORMATION
CORRUPTION
ENTERPRISE DEVELOPMENT
LACK OF ACCESS
FINANCIAL REGULATOR
CREDIT CRUNCH
MICROFINANCE INSTITUTIONS
EQUITY FINANCING
EQUITY INVESTMENT
MARKET DEVELOPMENT
INFORMATION SYSTEM
MORAL HAZARD
INITIAL PUBLIC OFFERING
FINANCES
OUTREACH
COMMUNITY BANKS
INVESTMENT OPPORTUNITIES
BUSINESS PLANNING
OVERHEAD COSTS
EARNINGS
SMALL BUSINESSES
START-UPS
BRIBES
CREDIT INFORMATION SYSTEMS
FINANCIAL INSTITUTION
BRIBE
BANK LOANS
BALANCE SHEET
HUMAN CAPITAL
EQUITY INVESTMENTS
INTERNAL FINANCING
LOAN APPLICATION
SOCIAL SECURITY
FINANCIAL EDUCATION
SAVINGS
SMALL LOANS
GOVERNMENT INTERVENTIONS
MICROFINANCE
PUBLIC FUNDS
TERM CREDITS
BUSINESS LOANS
ENTREPRENEURS
EQUITY INVESTORS
DEVELOPMENT FINANCE
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http://hdl.handle.net/10986/21750Abstract
Small 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.Date
2015-04-15Type
Working PaperIdentifier
oai:openknowledge.worldbank.org:10986/21750http://hdl.handle.net/10986/21750
Copyright/License
http://creativecommons.org/licenses/by-nc-nd/3.0/igo/Related items
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Scaling-Up SME Access to Financial ServicesWorld Bank (Washington, DC, 2013-02-26)Small 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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Expanding Access to Finance : Good Practices and Policies for Micro, Small, and Medium EnterprisesHamel, Iva lIieva; Criscuolo, Alberto; Malhotra, Mohini; Fan, Qimiao; Chen, Yanni; Savchenko, Yevgeniya (Washington, DC : World Bank, 2007)This book on micro, small, and medium enterprise (MSME) finance is intended primarily for government policy makers. It presents a policy framework whereby governments can support increased access by MSME to financial services based on empirical evidence and practices. MSME complain that lack of access to finance constrains their growth and competitiveness. Indeed, financial sector policies often work against the ability of commercial financial institutions to serve MSME, albeit often unintentionally. In many countries, lack of competition in the banking sector limits pressure on banks to reach out to MSME client segments. High risk and high transaction costs-real or perceived-associated with bank lending to MSME likewise constrain access. Often, supervisory and capital adequacy requirements penalize banks for lending to enterprises that lack traditional collateral. Attempts by governments to address these constraints and offset the inequalities in financial sector policy generally have not achieved the desired results. This book lays out a market-based policy framework for governments that focuses on delivery of financial services to MSME on commercial terms. The framework guides governments in focusing scarce resources on developing an inclusive financial sector policy; building sound financial institutions; and investing in a supportive information infrastructure, such as credit bureaus and accounting standards. Examples from around the world illustrate how such a strategy has helped build more inclusive financial systems for all.
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Enhancing Access to Finance for Technology Entrepreneurs : Analysis of Highly Innovative, High Growth Start-Ups in Vietnam, Cambodia, and NepalWorld Bank Group (Washington, DC, 2014-12-18)The first part of the study provides
 contextual background to the financing gaps and associated
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 These barriers are driven by both supply and demand sides of
 the financing equation. Supply side barriers include: high
 transaction costs associated with financing; high levels of
 credit risk associated with HI start-ups; high collateral
 required by financial institutions; non-conducive legal and
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 of start-up expertise and dedicated resources by financiers;
 and finance products that are not tailored to HI start-ups 
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 reliance by HI start-ups on informal financing sources; lack
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 external investors. This section also contains a broad
 overview of the country frameworks governing the start-up
 sector, together with some of the initiatives relating to
 access to finance. The second part of the study covers the
 fieldwork undertaken in Vietnam, Cambodia, and Nepal. The
 fieldwork gathered views from investee firms (irrespective
 of whether they were successful in raising finance or not),
 investors, and other stakeholders. The fieldwork was aimed
 at understanding the severity of the financing gap for HI
 start-ups, the stage(s) of financing impacted by lack of
 access to finance, and the sources of financing for HI
 start-ups. Lastly, financing catalyst recommendations
 address non-financing impediments, which if overcome will
 have a positive impact on access to finance.