Financial Institutions  Priorities  Microenterpreneurs and Small Business

Microentrepreneurs and Small Businesses

A microfinance client in Tonga. © South Pacific Business Development


Micro, small, and medium enterprises are critical for the economic and social development of emerging markets. They create jobs and generate income for low-income people. Yet, access to financial services for SMEs remains severely constrained in many developing countries.

IFC works to increase access to these services, by providing funding for equity, loans, and mezzanine finance to financial intermediaries focusing on SME financing. We also work to build capacity of financial intermediaries and raise awareness on best SME banking practices. IFC uses both investments and technical assistance to support financial intermediaries’ outreach to the SME sector more effectively and efficiently.

In the fiscal year ended in June 2014, IFC’s Global SME Banking Advisory Services Program comprised 95 projects spanning 52 countries and totaling $96 million. About 62 percent of these projects were focusing on International Development Association (IDA) countries, with 18 percent in conflict-affected or fragile states. Almost 36 percent of the projects included a component supporting targeted lending to women-owned SMEs.

Activities undertaken by the program under the G-20 initiative helped cement IFC’s position as a global thought leader in the SME finance area. As the technical lead for the G-20 SME Finance Sub-Group under the Global Partnership for Financial Inclusion (GPFI), IFC’s program led the production of a stocktaking report which included a literature review on SME finance challenges, the collection of more than 160 SME finance models, and policy recommendations to scale up SME access to finance.

 

EXAMPLES OF WHAT WE DO

MICROFINANCE
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.

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BANKING ON WOMEN