BlueOrchard conducted a survey of a sample of financial institutions which lend to SMEs across different regions with the objective of identifying differences and commonalities between SME markets and the needed improvements in terms of services and financing for SMEs in emerging and frontier markets.
This study presents the findings of the survey exploring how SMEs can be supported to achieve the SDGs, the challenges and opportunities SMEs face, and how their further development can be supported. The main findings of the survey show that:
- Credit remains the main source of SME financing, with loan sizes and maturities varying by region and being almost always collateralized;
- SMEs are impacted by commodity prices and the development of natural resources sectors;
- When financing is combined with business advisory services and capacity building the impact of financing can be enhanced and credit risk mitigated;
- Credit unions, cooperatives and microfinance institutions tend to have greater outreach to informal sector SMEs compared to banks;
- Legal, regulatory, market and political stability is required and in some regions supersedes other requirements for further developing;
- Start-ups and those SMEs that operate in the informal sector are most limited in the access to credit.
