SME Banking

Small and medium enterprises (SMEs) are critical for the economic and social development of emerging markets. They play a major role in creating jobs and generating income for low income people; they foster economic growth, social stability, and contribute to the development of a dynamic private sector. As such, access to financial services is vital in developing a vibrant SME sector in any economy. In many emerging markets, however, access to financial services for SMEs remains severely constrained.

IFC's Role
IFC works to increase access of SMEs to financial services in developing countries by providing funding for equity, loans and mezzanine finance to financial intermediaries (FIs) focusing on SME financing and by building capacity of FIs and raising awareness on best SME Banking practices. Since 2000, IFC has shifted away from direct investments in SMEs to a more focused, efficient, and effective approach relying nearly exclusively on our FI investments to reach SMEs. This puts the Global Financial Markets department front and center in the Corporation’s strategy to reach this important market segment.

Achievements
IFC offers a wide range of financial products, including loans, equity and risk management solutions, to help financial institutions scale up or enter the MSME market. As of June 2010, IFC committed a total of $8.5 billion to MSME finance globally, with $2.5 billion in fiscal year 2010. In addition, IFC’s microfinance institution (MFI) clients had 6 million loans outstanding to micro-enterprises globally by end of 2009, totaling $5.7 billion. Similarly, IFC’s SME financial institution (SME FI) clients had 1.3 million loans outstanding to SMEs by end of 2009, totaling $97.1 billion globally.




Resources
SME Banking Brochure

SME Banking Knowledge Guide
The guide supports financial institutions in making informed choices by sharing challenges, opportunities, and effective practices in SME banking operational models from across the globe and through practical examples of SME banking provided by a number of featured financial institutions. (Second Edition 2010)

2010 Reach Data Analysis Factsheets
- Global
- IDA
- Europe and Central Asia
- East Asia and Pacific
- Latin America and Caribbean
- Middle East and North Africa
- South Asia
- Sub-Saharan Africa

For more information on IFC’s SME Banking Investment and Advisory Services contact:

Paul Rusten | Email: PRusten@ifc.org
Ghada Teima | Email: GTeima@ifc.org