Leveraging SME Finance through Value Chains in CAREC Landlocked Countries

Small and medium-sized enterprises (SMEs) in Central Asia Regional Economic Cooperation (CAREC) countries face significant challenges in participating in international trade due to their limited scale, capital, technology, and managerial capacity, and their lack of direct access to seaports, generally inadequate transportation and logistics infrastructure, high trading costs, and underdeveloped financial systems. The development of global value chains has expanded the potential for SMEs to participate in international trade. By joining global value chains, SMEs can contribute to economic development by helping to diversify the production base, create employment opportunities, alleviate poverty, and increase regional food security. Leveraging SME Finance through Value Chains in CAREC Landlocked Countries takes stock of the challenges faced by SMEs in seven CAREC economies, including identifying cultural, procedural, institutional, and regulatory disincentives. It assesses opportunities for SMEs to link with both domestic and global value chains and the potential impact of this on their access to finance. The volume also proposes policy recommendations to improve SMEs’ access to finance, especially in the agri-business sector. The recommendations address effective regulatory frameworks, access to finance, programs funded by foreign donor institutions, guarantee schemes, improvements in entrepreneurial skills and networking among SMEs, and the use of information and communication technology. The outcomes and findings will prove useful for policy makers, think tank researchers, and academics.