The Global Competitiveness Report 2012-2013 by the World Economic Forum lists access to finance as the second or the third top constraint to SME growth in almost all developing countries.Tremendous work has been done by our development partners (IFC, EBRD, AfDB and ADB) in providing enhanced liquidity to enable businesses to gain access to financing. But the challenge remains that all these provisions still do not reach SMEs as they cannot meet the bank underwriting conditions to access finance. In other words, in many cases banks have the possibility to lend, but they can’t find qualified borrowers.A recent International Finance Corporation (IFC) study places SMEs’ financing gap in developing countries at $2 trillion. The report called “Closing the Credit Gap for Formal, Informal, Micro, Small and Medium Enterprises,” shows over 200 million formal and informal SMEs in developing countries do not have a loan or overdraft, or have a loan or overdraft but still find access to finance a constraint. A sizeable number of exporters or potential exporters fall into this category. On the other hand, on average, about two-thirds of full time jobs in developing economies are provided by small firms, therefore urgent action is essential in meeting their financial needs, supporting their growth.
