We are faced with a big challenge. The recent economic downturn eliminated 67 million jobs globally and saw trillions of dollars of wealth disappear. To add to this, emerging countries need to create another 600 million jobs by 2020, mainly in Asia and Africa, just to keep employment rates constant. So how can we generate employment and spur economic growth?
Think small.
On 10 September 2015, policy-makers, development financial institutions and regulators came together in Antalya, Turkey to discuss access to finance for small businesses. Small and medium-sized enterprises are essential for economic growth because they account for over 95% of businesses worldwide and provide more than half of all jobs. According to World Bank Group research, the poorer the country, the greater the share of employment provided by small businesses. Yet half of all small businesses remain credit constrained in emerging markets, and struggle to raise the financing necessary to invest and create new jobs.
The G20 Turkish Presidency hosted this event to provide an opportunity for G20 and interested non-G20 countries to share their national SME finance strategies. Several countries including Turkey, China, Germany, Vanuatu, Palestine and Peru highlighted progress made in accelerating small business finance and made new commitments for boosting country-level efforts.
At the AFI Global Policy Forum in Maputo, 2-4 September 2015, 32 AFI member institutions signed up for the inclusion of SME Finance as a pillar of the Maya Declaration and to make specific SME Finance commitments. Member countries will be setting targets to close the SME finance gap between demand and supply in their countries, and will engage with relevant stakeholders from development partners, the private sector, and others who are able to contribute towards the achievement of their commitments.
Matthew Gamser, CEO of the SME Finance Forum said “The G20 Global Partnership for Financial Inclusion has made small business finance a top priority for restoring economic growth and we are happy to support this endeavor. The valuable recommendations we received from policy-makers today will go a long way in strengthening the G20’s approach in this area.”
