By creating employment, increasing productivity and fostering innovation, the small and medium-sized enterprise (SME) sector is key to economic – and even social – progress in developing and developed economies alike.
There are many advantages in “being small”. For example, being well placed to respond relatively quickly and flexibly to changing market conditions. SMEs are often labs where competition and hands-on management suggest creative solutions to emerge in the market.
The other side of the coin, though, is that small enterprises that wish to grow need to supplement ideas and ambition with access to finance and the right technical and managerial know-how.
The global context is changing for smaller businesses and new opportunities are arising. Digitalisation, big data and global value chains find their concrete form in mobile banking/lending solutions, e-commerce and hub-to-hub supply chains.
These new technologies and approaches have the potential to make SMEs more visible to buyers in larger markets. They also provide the kind of information needed by creditors who traditionally have found SMEs too risky to finance.
But this is not the end of the story. To help SMEs thrive, the viability and scale of these approaches needs to be continuously examined and refined and international financial institutions, traditional lenders, regulators and disruptive innovators all have a crucial role to play.
Momentum to tackle SMEs’ financial inclusion is building. It is a priority for the Chinese Presidency of the Business 20 (B20) which will also focus on SME access to global value chains and on new ways to boost their development.
Global experts and practitioners of SME finance – traditional and innovative – will discuss this topic at the EBRD 2016 Annual Meeting and Business Forum, on Wednesday 11 May.
Financial intermediaries and international business development actors will offer their views on consolidated and pioneering practices that can successfully complement each other in serving SMEs’ needs.
“The EBRD has been focusing on strengthening SMEs in its region for decades and, since we launched the Small Business Initiative two years ago, we’ve been systematically combining direct finance, indirect finance and business advice in parallel with policy dialogue for reforms aiming at easing the SMEs’ capacity to play their economic role to the full potential,” said Claudio Viezzoli, EBRD Managing Director for SME Finance and Development.
“But for SMEs, the largest and most flexible group of enterprises, the frontier of potential is always moving. This debate will further help analyse new trends and advocate best practices in supporting SMEs finance and development.”
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2014 The Global Indian New Network (TGINN)