How to close the gap in financing for SMEs in developing countries? A new report by Dalberg, a development advisory group, puts forward ideas and outlines contributing roles for public and multilateral actors.

SMEs are a fundamental part of the economic fabric in developing countries, and they play a crucial role in furthering growth, innovation and prosperity. However, they are strongly restricted in accessing the capital that they require to grow and expand, with nearly half of SMEs in developing countries rating access to finance as a major constraint.

With targeted interventions, IFIs such as the EIB, play an important role in closing this gap. Financial and social sustainability is further enhanced by judiciously selecting and screening intermediaries, applying strict lending standards and carefully calibrating controls and incentives. Increased research and empirical evidence will help to further strengthen the case for SME support and the effectiveness of specific interventions. This report was drafted by Dalberg Global Development Advisors.