Analyzes the lack of funding for small and medium-sized enterprises (SMEs) and recommends measures to foster an improved flow of financing.

As in most economies, micro, small, and medium enterprises (MSMEs) in emerging markets are widely believed to be the engine of growth across. Over the last decade, many researchers and academics have tried to analyze the issue of MSME access to finance, emphasizing their dependence on credit and cash flows. This study presents a new approach to the estimation of the unmet demand for financing from MSMEs in developing countries. Importantly, it also describes the potential implications for the public-sector bodies, private sector financial institutions, and technology providers. The present research adds significant value to the repository of data in the MSME space, and opens new opportunities for further investigation. It estimates both supply of and demand for MSME finance on a global scale, which has never been done in a comprehensive way. This approach estimates MSME equilibrium lending in developed economies according to the industry, age, and size categories, and applies this benchmark to MSMEs in developing countries. It estimates the MSME finance gap as the difference between current supply and potential demand which can potentially be addressed by financial institutions. This report is divided into five sections. The first section reviews the literature about financing MSMEs. The second section describes the methodology of the present research, data sources, and the model specification. The third section analyzes the results of the finance gap estimation, including regional comparisons, formal, and informal MSME sector results, and gender disaggregated statistics. The fourth section elaborates on the implications of the finance gap for the public sector, including government agencies and multilateral organizations and lending institutions. Finally, the fifth section highlights implications for the private sector, including banks and non-bank financial institutions, as well as financial technology companies.

The lack of funding available from the financial sector for small and medium-sized enterprises (SMEs) is known as the financing gap. This report analyzes this gap for both credit and equity financing and seeks to determine how prevalent such a gap may be, both among OECD countries and non-OECD economies, and recommends measures to foster an improved flow of financing to SMEs and entrepreneurs. A significant number of entrepreneurs and SMEs could use funds productively if they were available, but are often denied access to financing. This impedes their creation and growth. The "financing gap" was the subject of the OECD Global Conference on "Better Financing for Entrepreneurship and SME Growth", held in Brasilia, Brazil in March 2006. Vol. 2 presents a synthesis of the Conference discussions on the credit and equity financing gaps, as well as on private equity definitions and measurements. It also offers a selection of papers given by some of the key stakeholders (SMEs, government and financial institutions) confronting these issues.--Publisher's description.

A synthesis of the Conference discussions as well as selected papers on the credit and equity financing gaps, as well as on private equity definitions and measurements.

A synthesis of the Conference discussions as well as selected papers on the credit and equity financing gaps, as well as on private equity definitions and measurements.

This book explores how the global financial and European sovereign debt crises have forced small-and-medium-sized businesses (SMEs) to reassess and adapt their funding strategies. At the heart of the matter is the worsening access to bank credit for such enterprises. Through this discussion we learn how crucial an understanding of SME-financing is to policy makers, in light of the fact that SMEs dominate the business landscape in Europe and are the main drivers of employment, growth and innovation in the European economy. Contributing chapters present expert analysis and investigate many topics including the problems faced by SMEs in accessing bank credit and the cost of funding and its determinants. Particular attention is also given to how credit-constrained enterprises may reformulate their funding strategies by employing alternative, non-bank, financial resources, and how regulators could support SMEs in broadening and improving their funding opportunities.

Explores the idea that Europe's growth problems may be caused by weaknesses in capital markets and in the access to risk capital. It addresses the evaluation of the financial needs and constraints of start-up firms and how these might be bridged. The role of public sector intervention is analyzed, focusing on international best practices.

"This book, titled SME Finance: Constraints and an Information Asymmetric Perspective, studies the gap between bank financing and the small and medium sized enterprises (SME) sector, based on the economic theories of information asymmetry and agency theory. Access to finance continues to remain one of the key constraints faced by SMEs to start and expand businesses, particularly in the developing economies where access to bank loans is subject to the availability of collateral. The SME financing gap, studied from the perspectives of both the key actors - banks and SMEs - is well presented in this book. The authors have used Sequential Explanatory Design, a mixed methodology, to collect data from SMEs and banks. The econometric model of the study represented SMEs' debt accessibility as a function of independent variables of loan repayment capacity, financial information, characteristics of the firm and owner and bank loan characteristics. The book provides empirical evidence that SME financing constraints are caused by factors arising from SMEs as well as the banks, primarily SMEs' high information opacity and banks' imposition of collateral to offset the credit risk. In the estimation of the econometric model, the size of collateral and owner's equity were among the most significant predictor variables. Likewise, the thematic analysis of interview data of credit officers to understand the banks' lending behavior evidenced a strong positive relationship between the size of the collateral and owner's equity and access to bank loans. SMEs' high information opacity and credit risk induced adverse selection and credit rationing on the part of finance providers. The findings of this book contribute towards academic literature on developing economies characterized by limited data available for academic and empirical research. This book provides a unique example of rigorous research on SME finance within an information economics framework. The theoretical issues are nicely balanced by the practical application of information economics to an emerging market. It can be used as a reference by researchers, academics, practitioners and policy makers in the areas of development finance, banking, development economics, microfinance and rural development. In addition, it can be used as an academic reference for a finance subject at the Master's or Doctoral level. The book is relevant to key stakeholders in understanding the debt inaccessibility from SMEs and the banks in drafting policies and measures to address the SME financing gap"--

The 9th edition of the Scoreboard on Financing SMEs and Entrepreneurs report provides data from 48 countries around the world on SME lending, alternative finance instruments and financing conditions, as well as information on policy initiatives to improve SME access to finance.