SME Finance Forum members have opportunities to influence policy outcomes under Saudi G20 Presidency
Small and medium-sized enterprises (SMEs) account for 90% of all operational businesses, two thirds of employment worldwide, and half of world’s GDP. Despite their important role as the engine of growth, the enabling policy environment in many countries is not well suited to their growth and they very often lack access to financing to grow their businesses.
According to the G20, the global SME financing gap is significant. Over 200-245 million SMEs worldwide are in need of financing to invest, grow and create employment opportunities.
With approximately half of these firms operating in the G20 countries, in 2015, the policymakers developed a joint action plan outlining key policy measures necessary to close the financing gap. In 2016, the focus broadened to promote financial inclusion among SMEs with the release of High Level Principles. Incremental efforts were made in the subsequent period (2017-19) to advance the SME policy agenda. Under Saudi Arabia’s presidency of G20 next year, it is expected that SME finance and financial inclusion needs of women and youth will once again be a top priority and policy efforts to address the financing gap will intensify.
Most financial institutions and fintechs operating in the SME segment are unaware of the G20 policy agenda, especially on how it affects them or what additional aspects could be considered as part of the policy reforms.
The SME Finance Forum was established in 2012 by the G20 Global Partnership for Financial Inclusion (GPFI) explicitly for this purpose: to act as the “knowledge” link between the G20 policymakers and the private sector. For the Forum’s members, it serve as the knowledge center for data, research and best practices for promoting SME finance and a market place for SME tech innovations. For policymakers, it provides valuable data points and evidence to formulate the policies that have a deeper impact.
The Forum is uniquely placed in acting as the link between policymakers and service providers. Many members still face policy challenges in the countries they operate in but do not have access to policymakers to demonstrate innovations or voice concerns. Various platforms – events, webinars, research and policy outreach – can be used by members in a collective way to express concerns or updates related to the policy environment.
Starting with the SME Finance Forum’s annual flagship event, the Global SME Finance Forum 2019, taking place in Amsterdam on October 7-9, the next 12 months will be critical. With SME finance once again a top priority for G20 policymakers in 2020, members should find every opportunity to promote their priorities using the knowledge platforms of the SME Finance Forum.