Publications

From a boutique noodle maker in Asia to a producer of hand sanitizers in Africa, SMEs are crucial to the creation of dynamic, competitive, and inclusive economies. They generate jobs and support economic growth in developing markets, playing an essential role in reducing poverty and promoting shared prosperity.

SMEs face significantly more constraints than larger firms in accessing finance, particularly in emerging markets. IFC estimates that about 43 percent of formal SMEs in developing countries have an unmet financing need of nearly $4.1 trillion. Without access to finance, SMEs cannot grow and create jobs. IFC launched the Global SME Finance Facility (GSMEF) in 2012 to address the reluctance of financial institutions to serve SMEs in emerging markets following the 2008 financial crisis. GSMEF, which is funded by the governments of the United Kingdom and the Netherlands, has enabled IFC to induce financial institutions to serve SMEs, particularly SMEs that they do not normally reach, including womenowned SMEs, very small enterprises, or climate-smart SMEs. By blending these donor governments’ funds with its own funds, IFC has structured innovative investments and delivered value-enhancing advisory services, thereby crowding in capital to help SMEs grow. In this publication we reflect on what has worked, what can be improved, and where to focus future efforts. We seek to understand whether, with GSMEF’s support, IFC’s financial institution clients have indeed served more SMEs, thereby creating jobs and economic opportunity. 

This report has been produced by IFC.