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Unlocking Access to Finance for SMEs: A Cross-Country Analysis

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  • Mr. Armand P Fouejieu
  • Anta Ndoye
  • Tetyana Sydorenko

Abstract

Countries in the MENAP and CCA regions have the lowest levels of financial inclusion of small and medium enterprises (SMEs) in the world. The paper provides empirical evidence on the drivers of SME access to finance for a large sample of countries, and identifies key policy priorities for these two regions: economic and institutional stability, competition, public sector size and government effectiveness, credit information infrastructure (e.g., credit registries), the business environment (e.g., legal frameworks for contract enforcement), and financial supervisory and regulatory capacity. The analysis also shows that improving credit information, economic competition, the business environment along with economic development and better governance would help close the SME financial inclusion gap between MENAP and CCA regions and the best performers. The paper concludes on the need to adopt holistic policy strategies that take into account the full range of macro and institutional requirements and reforms, and prioritize these reforms in accordance with each country’s specific characteristics.

Suggested Citation

  • Mr. Armand P Fouejieu & Anta Ndoye & Tetyana Sydorenko, 2020. "Unlocking Access to Finance for SMEs: A Cross-Country Analysis," IMF Working Papers 2020/055, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2020/055
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    References listed on IDEAS

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    1. Aaron Mehrotra & James Yetman, 2014. "Financial inclusion and optimal monetary policy," BIS Working Papers 476, Bank for International Settlements.
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    Cited by:

    1. Piotr Å asak, 2022. "The role of financial technology and entrepreneurial finance practices in funding small and medium-sized enterprises," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 18(1), pages 7-34.
    2. Zahra Gorjian Khanzad & Ali A. Gooyabadi, 2021. "Development of Strategic Resilience Framework for Small Businesses Post-COVID-19," Businesses, MDPI, vol. 1(3), pages 1-15, September.
    3. Juan M. Dempere & Alexandrina M. Pauceanu, 2022. "The impact of economic-related freedoms on the national entrepreneurial activity," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-20, December.
    4. Ei Ei Thein & Atsushi Niigata & Kazuo Inaba, 2024. "Concentrated bank market and SMEs’ collateral issues: a study of the firms of developing Asian countries," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 13(1), pages 1-19, December.
    5. Edward Kiringa & Fredrick W.S. Ndede & Argan Wekesa, 2021. "Relationship lending and access to financial services by SMEs in Kenya," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(5), pages 235-244, July.
    6. Matallah, Siham, 2022. "Rampant corruption: The dilemma facing economic diversification in oil-abundant MENA countries," Resources Policy, Elsevier, vol. 75(C).

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    More about this item

    Keywords

    WP; SME; SME access; firm; SME financial inclusion; MENAP country; World Bank enterprise; return on equity; Small and medium enterprises; Financial inclusion; Credit; Business environment; Global; Central Asia and the Caucasus; Middle East; North Africa; Europe; Small and Medium Sized Enterprises;
    All these keywords.

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