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SME Financing - Reaching Scale Context and Overview

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Presentation on theme: "SME Financing - Reaching Scale Context and Overview"— Presentation transcript:

1 SME Financing - Reaching Scale Context and Overview
THE WORLD BANK SME Financing - Reaching Scale Context and Overview

2 The challenges Investment Climate Assessments conducted in Uganda, Tanzania, and Kenya (2003 and 2006) show that the enterprises surveyed rank access to finance and cost of finance as major or very severe obstacles to firm growth Firms rely primarily on retained earnings to finance investment Only large firms finance investments through the formal banking sector

3 Constraints to Firm Investment – Tanzania
Source: 2006 Investment Climate Survey and 2003 Investment Climate Report

4 Constraints to Firm Investment – Uganda
Source: 2006 Investment Climate Survey

5 Constraints to Firm Investment-Kenya
Source: 2003 Investment Climate Report

6 Sources of Finance (2003)

7 Sources of Financing for Manufacturing Firms- Uganda: Working Capital and Investment Needs (ICA 2003)

8 Tanzania Sources of Finance (2003)

9 The approach Improving the enabling environment
Strengthening the capacity of SMEs Strengthening the capacity of financial institutions

10 The environment: Getting Credit (DB 2006)
Measures on credit information sharing and the legal rights of borrowers and lenders. Legal Rights Index ranges from 0-10, higher scores indicating that those laws are better designed to expand access to credit. The Credit Information Index measures the scope, access and quality of credit information available through public registries or private bureaus. Ranges from 0-6, with higher values indicating more credit information is available from a public registry or private bureau. Indicator Burundi Rwanda Tanzania Uganda Kenya Region OECD Legal Rights Index Credit Information Index Public registry coverage (% adults) Private bureau coverage

11 The Workshop Not about: Instead: definitions government policies
“expert” advice Instead: presentations by practitioners practical examples dialogue

12 Agenda Overview of approaches South America
Procredit and Access Holdings Asia Beyond credit East Africa Breakout discussions DP support


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