Policy & Regulation

This report offers strategic and actionable guidance to policymakers in strengthening their access to finance policies for small and medium enterprises (SMEs). This report emphasizes the need to improve the enabling environment for SME debt and equity financing. It outlines a roadmap of eight key actions to guide policymakers in achieving this. While such reforms are necessary, they are often insufficient to fully address SME financing constraints. Targeted financial programs thus remain essential to bridge the financing gaps effectively. This report outlines seven actions to improve the design and implementation of these interventions to maximize their impact and the effective use of public funding. This report also underscores the importance of a tailored approach to address the distinct challenges faced by specific SME segments, particularly those of women-owned (and led) SMEs, SMEs in agriculture, SMEs in fragile and conflict-affected states, and those seeking financing for climate change adaptation and mitigation.

Summary

The G20 Global Partnership for Financial Inclusion (GPFI) Action Plan for Micro, Small, and Medium enterprises (MSME) Financing is a call to action to intensify the efforts of G20 and willing non-G20 countries to close the financing gap for MSMEs.

MSMEs represent a significant share of economic activity and capture a large share of employment. However, MSMEs continue to have difficulties accessing finance. The credit gap for emerging market and developing economies (EMDEs) was estimated at $5.7 trillion in 2019, with the gap for Women-owned MSMEs representing 34% of this amount. Addressing this gap will not only support MSME growth and resilience but also boost national economies and enhance countries’ abilities to meet the sustainable development goals.

The Action Plan identifies key enablers of MSME financing, such as fintech, and calls on governments to implement a robust enabling environment for MSME financing that can address the ongoing challenges frictions, as well as recommendations to improve the effectiveness of financial interventions and mobilization of private financings.

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Business Ready (B-READY) 2024 report assesses the regulatory framework and public services directed at firms, and the efficiency with which regulatory framework and public services are combined in practice.