In recent years, there has been a renewed appreciation for the critical role SME-focused development banks play in the economies of many countries. Besides supplying much-needed capital to businesses during times of crisis and recession, development banks are increasingly supporting essential change.
Washington, D.C. October 16, 2018 – The Development Bank of Nigeria (DBN) became the newest member of the SME Finance Forum, a global membership network that brings together financial institutions, technology companies, and development finance institutions to share knowledge, spur innovation, and promote the growth of SMEs.
Africa's Times of News, provided insights to the IFC estimation that Africa’s finance gap for small and medium enterprises (SMEs) stands at $331bn. Micro, small and medium enterprises (MSMEs) form the backbone of most African economies and investment in this sector will significantly enhance job creation and wealth development. The informal sector contributes 38% of sub-Saharan Africa GDP yet 51% of the continent’s 44m formal MSMEs lack the finance necessary to grow. The true scale of the shortfall is almost certainly even greater given the lack of data.
Medici examines the widening financial gap in India and their lack of push for institutional credit for consumers. With consumer debt to GDP at only 17 percent, India falls behind major economies of Asia Pacific.
According to the article, “In the absence of institutional credit at fair interest rates for a majority of the population, people at the bottom of the pyramid are left devoid of opportunities and fail to be included in the financial system.”
Key contributing factors to this issue of financial inclusion include:
BRAC Bank was established in 2001 to help grow the vital, yet unbanked SME sector in Bangladesh. The bank’s reason for being is to serve SMEs; with 186 bank branches, 2,500 specialized SME staff and the provision of more than 60 percent of the collateral-free SME loans in Bangladesh, the bank is doing exactly that.
The overall lending to SMEs by BRAC Bank reached 41 percent of the total loan book at the end of 2017, an increase from 34 percent just two years earlier.
Washington, D.C. October 9, 2018 – Access to Finance Rwanda became the newest member of the SME Finance Forum, a global membership network that brings together financial institutions, technology companies, and development finance institutions to share knowledge, spur innovation, and promote the growth of SMEs.
Matthew Gamser, CEO of the SME Finance Forum, was the keynote speaker at the ADFIMI International Development Forum on September 11-12 in Istanbul, Turkey. Under the theme, “SME Finance and Development in the Age of Digitalization,” the Forum analyzed the current state of knowledge about contributions of SMEs to economic and social well-being globally and in Organization of Islamic Cooperation Countries.
SME Finance Forum member, the Overseas Private Investment Corporation (OPIC) approved approximately $895 million in financing and political risk insurance that will benefit Africa, Asia and Latin America in energy, healthcare, housing and financial services, according to a release by OPIC.
The funds will contribute to the following OPIC initiatives: 2X Women’s Initiative, the Connect Africa Initiative, the Northern Triangle Initiative and the Indo-Pacific Initiative.
The Future of Business Survey in collaboration with Member World Bank, Facebook and OECD provides monthly data on the economic environment for SMEs around the world. Key findings in the publication included:
A packaged financial solution, launched by Co-operative (Co-op) Bank of Kenya, will go towards supporting MSMEs.
Co-op Bank of Kenya has worked with the International Finance Corporation (IFC) over the past year, to understand the inner-workings of the MSME business segment to improve MSMEs. Co-op Bank will offer training programs, forums and financial tools to build and grow “world class entrepreneurs,” according to the article.
