SME FINANCING DATA USER NEEDS: CANADIAN PERSPECTIVE OECD Workshop On SME Statistics September 17-19, 2003 Tim Davis Agriculture, Technology and Transportation Branch Statistics Canada

Overview Recognizing the role of SMEs SME Finance Data – What We Had Review of the Financial Services Sector The Canadian SME-FDI SME Financing data: Users and Needs SME-FDI Data Collection Programs Highlights of Findings User Reactions and Outstanding Needs September 17, 2003

Evolution: SME Sector Gains Respect Prior to 1980s-Little attention to SMEs 1980s: Political awareness but little Policy interest Low-job recovery from 90s recession and SMEs were “discovered” SMEs seen as engine for job creation and growth September 17, 2003

Evolution: SME Sector Gains Respect SMEs lobbied for more substantial support “Financing” was a frequent complaint 1966: Government mandated a Financial Services TF to address SME financing The “MacKay TF” eventually led to data…. And more September 17, 2003

SME Finance Data: The Way We Were Several ad hoc “proprietary” data sets Bankers, Venture Capitalist, SME Groups all cited data to support their positions No comparability; Perceptions of bias Data generated debates, but Much confusion; Little direction September 17, 2003

Review of the Financial Services Sector Government explicitly requested recommendations on SME financing MacKay TF: Unable to make recommendations Insufficient data for credible analysis Hence: Improve data first! The SME Finance Data Initiative was borne Innovative partnership of policy Departments ands statistical agency September 17, 2003

The Canadian SME-FDI Partnership of Statistics Canada, Industry Canada, Finance Canada Comprehensive and objective data sets Both demand for and supply of financing Standard concepts and definitions Analysis supports policy and drives data design New base funding September 17, 2003

SME Financing data: Users and Needs Three User Groups SMEs and Their Associations Objective data to substantiate their case Drive policy changes; improve access Financial Services Sector Also to substantiate case Understand potential market Learn to serve the SME client September 17, 2003

SME Financing data: Users and Needs Researchers and Policy-makers Need is greatest here Guide beneficial interventions Avoid market distortions Identify real gaps Isolate market bias against specific target groups September 17, 2003

A Summary of User Needs Type of financing used by SMEs Financing requests, by amount, by source Financing “success” by size and characteristics Financing supply by business size Impact of financing decisions on SMEs Geographic and characteristic detail if possible September 17, 2003

SME-FDI Data Collection Programs Supply-side survey by Statistics Canada By authorisation level not size of business Demand-side survey by Statistics Canada Characteristics of firms and their financing experience Needs and attitudes of SME owners re: financing September 17, 2003

Highlights of Survey Findings 82% of SMEs seeking loans, obtained them Only 23% sought loans Larger SMEs -> more requests Larger SMEs -> more successful Banks accounted for 2/3 of requests made September 17, 2003

Highlights of Survey Findings Only 18% sought loans 80% successful September 17, 2003

Small and medium-sized enterprises financing in Canada 2000 Thank you. It is a pleasure to be here with you all today. I would like to tell you about Statistics Canada’s experience in measuring information and communications technologies (ICTs) or information society indicators. I will briefly describe to you what our division does, and how we define, collect, measure, analyze and disseminate ICT indicators. I will also discuss our involvement in international harmonization of concepts and definitions

Outstanding Data Needs Demand Side Detailed firm characteristics Age, Stage of development Location, Industry Firm owner characteristics Education, Experience, Age, Gender, Ethnicity Financing impacts on unsuccessful SMEs September 17, 2003

Outstanding Data Needs Supply Side Financing by size of firm, not authorisation Detail by: Size, Location, Industry, Sector Angel financing Longitudinal studies of financing and impacts Continued development of concepts and definitions September 17, 2003

Conclusions Vital data program Users satisfied Active research program leading to more data demands Avoid complacency; Even successful data programs are in jeopardy September 17, 2003