SMEs are Engines of Growth and Job Creation
Small and medium enterprises (SMEs) play an important role in employment creation and income level or gross domestic product creation. As a consequence, SMEs constitute a key economic actor to achieve poverty alleviation and sustainable growth. In numbers, evidence showcases that regardless of the economy size, SMEs have created 67 percent of the global employment and between 60-70 percent of the global GDP is attributable to SMEs.
Policymakers around the world are aware of the pivotal role of SMEs in the global economy. Yet, when looking at the bottlenecks that prevent SMEs’ development, access to finance is one of the top barriers faced my many. Still, access to financial services remains a very significant challenge in emerging economies, particularly in the aftermath of the financial crisis.
Financial regulators, such as central banks or ministries of economy, are aware of their responsibility and mandate to work on implementing policy solutions that improve access to finance for SMEs. AFI member institutions established the SME Finance Working Group (SMEFWG) in 2013 with the aim of exchanging knowledge to set a common understanding of data indicators that needed to be shared and collected, define the role of financial regulators related to the access to finance, examine the global picture and heed lessons learned from all regions around the world, and to foster a joint peer-to-peer dialogue on tangible policy solutions that enable and improve the sustainability of small enterprises, with particular focus on financial sector policy.