How to Scale Support for Small Businesses?

Enterprise
101

Remittances is a great opportunity. Also, training on how to better use that source of finance is important.

102

our IFC-McKinsey data suggests that, for credit, Africa and the Middle East have the biggest (proportional) gap between supply and demand, but the biggest absolute gap is in Asia due to larger populations of MSMEs.

103

I feel this is just the start of a fascinating and important debate.

I never answered my question to myself about why African firms are small. I will find out and write a blog on this shortly, I promise.

Thanks for all the useful examples and analysis, everyone!

104

That brings us to the end of the live segment of this discussion. Please do feel free to continue to post your comments.

A big thank you to all our panellists, and all those who joined us today.

If you would like to read more about the topic, be sure to check out the articles in this week's blog series on Supporting SMEs with CDC:

105

let's not completely despair on this...starting to see some interesting stuff from the likes of AccessBank, Diamond Bank, Ecobank, and others...and starting to see some very interesting value chain finance for women from Coca Cola and others...lots of innovation going on in Nigeria...long way to go, but I'm hopeful

106

big institutions like OLAM and Unilever are increasingly involved in value chain financing mechanisms for SMEs. some specialised banks like Rabobank are also doing the same. This method of finance is also developing..

107

great exchanging with all of you. thanks for a very interesting hour on-line...in addition to my blog, people should visit the SME Finance Forum at www.smefinanceforum.org for much more on all of these topics, and you can join our "evergreen" conversations on such matters on our LinkedIn discussion group SME Finance Forum, now close to 3000 strong from around the world. and all is free and all the materials are downloadable.

108

I’m writing from Nigeria. Yes the solar ATMs can be a big market especially as regards to low cost of running from solar. The safety of the ATM is undeniably a challenge but is also an opportunity.

109

Thanks to you for moderating, Zahid!

110

Matthew, Can I have the link to your blog?

111

Hi Miebi - I think this is the link Matthew is referring to: http://smefinanceforum.org/322200/blog

112

Thank you Zahid

113

The main constraints to access of finance by MSMEs are many but can be broken down into 3: a) business enabling environment expressed through fiscal policies , laws and strategies. Many government policies are just there on paper not actually translated into appropriate implementable laws,strategies , technologiesand programmes for use by commercial banks to enhance development of innovative financial products for the SMEs; b) SMEs vulnerability to financial risks is higher relative to larger businesses due to lack of capital equipment or assets that can be used as a collateral in case of eventualities like default in repayment of a loan. Financial services providers opt for less risky businesses thereby taking calculated risks by prefering larger businesses with more assets than liabilities for them to stay in business; c) infrastructure: the SMEs are often doing their businesses in an inappropriate premises let alone the skills of Small and medium entrepreneurs hold the financial services providers from providing loans or grants to the SMEs. Further more, the mindset of some SMEs ought to be transformed to think commercial before they can access credit from banks and microfinance institutions.

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  • "In which areas can public-private collaboration provide the greatest value for small businesses, and where should investments focus?"

18 hours late, here is my take. A business model should already up and running and to a certain extent profitable before committing or involving a community. Too much risk in starting up an SME when a community has a lot of adjustments to make, e.g. values formation, capacity building, objectives setting, etc. The probability to success and sustainability is increased if less time is spent in experimenting with a business model. Governments and private investors must recognize the need for hand holding until the program can run profitably. I have seen a program or two collapse due to the "plug and play" manner of implementation. As I posted many moons ago, SMEs need all the incentives and tax breaks from government until the business is highly profitable. Private investors need to make time to professionalize the SME. Latly for private companies, value chain partnering is the way to go.

Regards,

David