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SME Finance Working
Group (SMEFWG)

SME Finance Working
Group (SMEFWG)

Micro, small and medium enterprises (MSMEs) are the lifeblood of many economies, particularly in developing countries. Globally, they represent about 90 percent of businesses and more than 50 percent of employment. MSMEs also contribute significantly to gross domestic product and exports, making their development a high priority for many governments around the world. The Maputo Accord was endorsed in Maputo Mozambique on SME Financing recognizing the importance of SMEs in driving economic growth, employment creation and contributing to broaden sustainable financial inclusion and reducing poverty at the household level, especially through micro-enterprises. The importance of MSMEs goes beyond conventional economic and social contributions. It is also relevant to the Sustainable Development Goals and in line with the principle of  “Leaving No One Behind”, a 2030 Agenda. 

Inclusion for MSME is equally as important as individual with an emphasis on access to credit. Despite of its importance, MSME development is still hampered by a relatively constrained access to finance, which inhibits growth and job creation in the sector. MSME finance gap in emerging economies is estimated at approximately $5 trillion – 1.3 times the current level of MSME lending. These numbers even more staggering at about $8 trillion if MSMEs in the informal sector were also included. Awareness of the impact of MSMEs on economic development has been steadily increasing since microfinance institutions (MFIs) and economic development agencies have focused on these enterprises’ potential contribution to economic and social stability.  MSMEs require different forms of financing based on their stage of development. Loans are mainly used for business expansion, financing of working capital, extension of the product range, purchase of fixed assets or to reach out to new markets, both local and international. Most common challenges that impede to MSME access to finance include no or lack of collateral, insufficient credit history and MSMEs are very vulnerable for any shock of normal condition.  It is important for MSME to improve their credit worthiness and necessary for the government to broaden the range of financing instruments available to MSMEs.

Microenterprises differ very much from small and medium enterprises. They often behave like individual clients in their financing requirements and are served by microfinance institutions or informal lending networks. Most microenterprises are active in the informal market and do not register their activities with a tax office. Collecting data about microenterprises can therefore be very difficult. SMEs, on the other hand, require a variety of financial services, including working capital and fixed asset loans that are often larger and with more flexible terms. They are more likely to be licensed and registered with the local tax authorities. Therefore, ministries collect and share data on SMEs and are better able to track their growth and impact on the economy.

SME the “Missing-Middle”

While microenterprises have apparently more secured alternative funding sources (e.g. family and friends, suppliers or microfinance institutions), SMEs are often perceived to be too big for MFIs, which cannot deliver adequate product solutions; too risky for larger financial institutions such as banks; and too financially needy for family or friends to lend to them. Worldwide, access to finance is one of the most prominent obstacles that SMEs face, particularly in low-income countries. The IFC reports that between 45 and 55 percent of SMEs in developing economies do not have access to loans.

Different demand and supply sides measures have been implemented globally ranging from legal and regulatory framework, enabling credit infrastructure, access to finance policy, market efficiency and new elements that change the financing landscape for MSMEs which include alternative finance and FinTech. In addition, regulators and policy makers also focus on cross-cutting priority topics such as informal sector, women and youth MSMEs and inclusive green finance, among others.

AFI members underscored the barriers that the MSMEs encounter in accessing and using formal financial services, which include among others, lack of capacity to start business, lack of collateral to access funding, financial education, and inadequate use of technology. In addition, lack of clear supportive policies for harnessing women and youth MSMEs access to finance has also been a critical challenge for achieving the goal inclusive finance for growth. In response,   various measures have been introduced to support MSMEs with both demand-side and supply-side initiatives, including legislation, regulation, infrastructure, capacity building and education. To address this policy challenges, the AFI established the SME Finance Working Group (SMEFWG) to share members’ insights and experience in promoting support for SME development also in-depth discussion on SME finance fundamental and emerging topics.

Women businesses account for 28 percent of businesses and 32 percent of the MSME finance gap, the latter of which the 2017 MSME Finance GAP estimated at USD1.7 trillion. Across all regions, women entrepreneurs have lower access to finance than their male counterparts, due to structural or other barriers impeding women access to formal financial services, as well as inadequate knowledge of women financial services. Thus restrict the optimum potential of women MSMEs in contributing to the country’s economy.

From the demand-side, women- MSMEs face various business and social challenges (e.g. nature, size, culture, socio-demographic and geography) as well as financial inclusion challenges (e.g. access, usage, affordability, awareness, financial literacy, social norms and safety). Hence, deliberate policy intervention to address these barriers will harness the economic potential of women to start and run MSMEs and expand existing MSMEs access to finance.

SMEF targets, 10 in total so far, are more focused and direct, with the network leveraging on the lessons of previous targets and progress updates.

Primary thematic area20132014201520162017201820192020

SMEF Maya Declaration commitments by AFI members
Maya Declaration targets610114855556465
In progress2452832343432
Completion rate67%60%55%42%42%38.2%47%51%


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AFI’s SME Finance Working Group (SMEFWG)

Created in 2013, AFI’s SME Finance Working Group (SMEFWG) actively shares knowledge and experience that promotes MSME access to finance in the network with the development of policy guidance and in-country implementation. Policy guidance is developed based on member demand and global strategic MSME finance topics, and its outcomes founded in the proven practical national financial policies and action plans of members. These best practices, which can be voluntarily adopted by members within their specific requirements, allow members to improve the existing or create a better financing landscape for MSMEs.



Ellen Joyce L. Suficiencia, Bangko Sentral ng Pilipinas

Co-Chair 1

Waleed Samarah, Central Bank of Jordan

Co-Chair 2

Dr. Emma Haiyambo, Bank of Namibia

Gender Focal Point

Lilliana Orozco Vindas, SUGEF Costa Rica

  • Exchange knowledge and establish a common understanding of policies that promote tangible access, usage and quality of financial services for MSMEs.
  • Identify policy frameworks learned from different regions and different actors both from demand- and supply-side involved in spurring the viability and financial inclusion of MSMEs, with a specific but not exclusive focus on financial sector policies.

Policy Model for MSME Finance

Guides members through a set of principles on key elements to be considered in developing or reviewing their MSME finance policies. The principles are derived from a compilation of best practices from the AFI network, complemented by insight from other international stakeholders in MSME development.

  • Planned deliverable: MSME Finance Policy Model.

MSME Data Subgroup:

In 2015, the joint subgroup published a guideline note on the Guideline Note 16: SME Financial Inclusion Indicators Base Set. It guides members on the use of indicators base set to measure the access, usage and quality of financial services for MSMEs in different member countries. Although the base set offers a limited set of indicators, it provides a reasonably comprehensive view into the state of financial inclusion for MSMEs in member countries. For an overall assessment of country financial inclusion, the indicators base set should be used with the AFI Core Set of Financial Inclusion Indicators.

To further compliment this document and progress the theme of SME finance data indicators, the joint subgroup convened in 2020 to identify the data collection process, update the list of indicators and meld higher-level socioeconomic data that is typical in most countries. Comprehensive MSME data collection is needed to produce informed and strategic decisions for MSME development policy and to improve access to finance, particularly for women MSMEs. The purpose of this is to use existing data commonly collected (demographic, social and financial inclusion) and suggest enhancements to include MSME-specific indicators for members to better establish a baseline for MSME ecosystems at the national level.

  • Planned deliverable: Framework for MSME Data Collection: A Guide for Gender Inclusive Finance and Case Study: Morocco Data Collection Process and MSME Definition

MSME Green Financing Subgroup (jointly with IGFWG)

While MSMEs can be victims of climate change, they can also contribute to the problem and, as such, play an important role in lowering global emissions of greenhouse gases in the long term. Currently, the subgroup is developing a special report on Green Credit Risk Guarantee, which falls under the scope of a protection framework to facilitate financing to individuals and MSMEs. This special report covers the challenges of inclusive green lending, opportunities for using credit risk guarantees and the scope and approach of the guideline for green credit risk guarantee.

  • Planned Deliverable: Special Report: Inclusive Green Finance Policies for MSMEs: Green Credit Guarantee

MSME Alternative Finance Subgroup:

Develop alternative finance policies for MSMEs to facilitate the significant credit gap by using existing non-bank financial institution financial products, such as leasing and factoring. Also, leverage financial technology and digitalization focusing on online financing platform like crowdfunding and peer-to-peer and alternative credit scoring for better credit assessments.

  • Completed: Survey Report on Alternative Financing for MSMEs, a Case Study on Leasing from Belarus, and Guideline note and Survey Report on Leveraging FinTech for MSME Financing.
  • Planned Deliverable: Alternative Credit Scoring for MSMEs (special focus on women MSMEs)

Onboarding of the Informal Sector Subgroup (jointly with FISPLG):

The informal sector or shadow economy includes economic activities hidden from official authorities for monetary, regulatory and institutional reasons. Informal economies are closely associated with the displacement of workers into insecure forms of labor markets, a transition of entrepreneurships and illegal or tax-evading activities. It has a negative impact on the development of sustainable enterprises, fair competition and national revenues, and – to some extent – can dampen productivity and undermine a nation’s financial health. One of the biggest obstacles in designing sound policies that address decent work deficits in the informal economy is a lack of research studies linking patterns of growth and the informal economy. In order to address the challenge of the transition to formality, individual countries, along with the social partners, would need to design an integrated set of policies and programs.

  • Completed: Guideline Note and Toolkit on Onboarding the Informal Sector.

Gender Inclusive Finance Subgroup:

Women MSMEs represent approximately 35 percent (8 million to 10 million) of MSMEs in developing and emerging markets. Despite improvements in financial inclusion globally, a gender gap of seven percentage points has remained unchanged since 2011 (65 percent of women have an account compared with 72 percent of men – Global Findex Database 2017). The value loss for the global economy is significative with a credit gap estimated at USD320 billion for women entrepreneurs. On one hand, women MSMEs face various business and social challenges (nature and size, culture, socio-demographic, geography) as well as financial inclusion challenges (access, usage, affordability, awareness, financial literacy, social norms, safety). On the other hand, economic opportunities arise from women MSMEs.

  • Completed: Policy Framework on Women-Led MSME Financing, Risk Sharing Facilities for Women-led MSMEs

Planned Deliverable: Policy Catalogue on Women-Led MSME Financing, Credit Guarantee Scheme for Women –led MSME (GIF) and

Other planned deliverables outside subgroup:
1. Agricultural Financing in Uganda: A Response to COVID-19 2. Credit Guarantee Scheme: Tool to Facilitate MSME Financing during and Post C-19 (selected Africa countries) 3. Digital Financial Services for Women-led MSMEs in Latin America









  • Ministry of Finance of Eswatini
    Regulatory Framework for Development Finance in the Kingdom of Eswatini
  • Bank of Zambia
    Pricing of Products and Services by FSPs
  • Central Bank of Solomon Islands
    MSME Bill and Business Loan Guarantee Scheme Framework & MSME Policy Performance Monitoring Framework
  • Reserve Bank of Vanuatu
    Micro, Small, Medium Enterprises (MSME) – Finance Survey: Vying the MSMEs Survey Challenges for ways forward
  • Royal Monetary Authority of Bhutan
    Regulations for Deposit Taking Micro Finance Institution (MFI) in Bhutan.
  • National Treasury of the Republic of South Africa
    South Africa’s SME Finance Infrastructure Projects — Partial Credit Guarantee System, Movable Assets Registry and Small Enterprise Shared Credit Information Services.
  • Banco Central de Reserva de El Salvador
  • Banco Central de Timor-Leste
  • Banco Central del Paraguay
  • Banco de Moçambique
  • Banco Nacional de Angola
  • Bangko Sentral ng Pilipinas
  • Bangladesh Bank
  • Bank Al-Maghrib
  • Bank Negara Malaysia
  • Bank of Ghana
  • Bank of Namibia
  • Bank of Papua New Guinea
  • Bank of Sierra Leone
  • Bank of Tanzania
  • Bank of Thailand
  • Bank of Uganda
  • Banque Centrale de Mauritanie
  • Banque Centrale de Tunisie
  • Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO)
  • Banque Centrale du Congo
  • Banque de la République d’Haiti
  • Banque de la République du Burundi
  • Central Bank of Armenia
  • Central Bank of Egypt
  • Central Bank of Eswatini
  • Central Bank of Jordan
  • Central Bank of Lesotho
  • Central Bank of Liberia
  • Central Bank of Nigeria
  • Central Bank of Samoa
  • Central Bank of Seychelles
  • Central Bank of Solomon Islands
  • Central Bank of Sri Lanka
  • Central Bank of The Gambia
  • Central Bank of the Republic of Uzbekistan
  • Central Bank of the Russian Federation
  • Centrale Bank van Suriname
  • Comisión Nacional Bancaria y de Valores de México (CNBV)
  • Direction Générale du Trésor, Ministère de l’Economie et des Finances, Madagascar
  • Financial Regulatory Commission of Mongolia
  • Maldives Monetary Authority
  • Ministère des Finances et du Budget du Sénégal
  • Ministry of Finance – Eswatini
  • Ministry of Finance Zambia
  • National Bank of Cambodia
  • National Bank of Tajikistan
  • National Bank of the Republic of Belarus
  • National Reserve Bank of Tonga
  • Nepal Rastra Bank
  • Palestine Monetary Authority
  • Reserve Bank of Fiji
  • Reserve Bank of Malawi
  • Reserve Bank of Vanuatu
  • Reserve Bank of Zimbabwe
  • Royal Monetary Authority of Bhutan
  • Sacco Societies Regulatory Authority (SASRA) Kenya
  • Superintendencia de la Economía Popular y Solidaria de Ecuador
  • Superintendencia General de Entidades Financieras de Costa Rica (SUGEF)
Events1st: Kuala Lumpur, Malaysia2nd: Yogyakarta, Indonesia
3rd: Port of Spain, Trinidad & Tobago
4th: Kuala Lumpur, Malaysia
5th: Maputo, Mozambique
6th: Ulan Bator, Mongolia
7th: Nadi, Fiji
8th: Mahe, Seychelles
9th: Sharm El Sheikh, Egypt
10th: Aman, Jordan
11th: Sochi, Russia
12th: Livingstone, Zambia
13th: Kigali, Rwanda
14th: Virtual Meeting
15th: Virtual Meeting
16th: Virtual Meeting
17th: Virtual Meeting
Member Institutions283951474947515858
Knowledge Products
Policy Changes
Peer Reviews


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