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Policies to Address Supply-side Issues in MSME Finance: A Global Compilation

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  • Michael Troilo
  • Nick Freeman
  • Masato Abe

Abstract

Access to finance (A2F) for micro, small and medium-sized enterprises (MSMEs) is critical for their survival and development, yet such access remains constrained for many MSMEs worldwide. In this article, the authors identify some of the key issues on the supply side of MSME finance globally, such as the lack of a credit registry/over-reliance on collateral, over-reliance on debt finance, high transaction costs of serving MSMEs and lack of non-bank/specialty financial institutions. They pinpoint the root causes and trace their impacts using concrete examples. The authors then share policy prescriptions over the short, medium and long terms that have been collected from around the world to address these concerns. They also provide case studies as inspiration to policymakers and other stakeholders in MSME finance. This compilation is a handy resource for policymakers and other stakeholders in MSME finance to understand and overcome barriers on the supply side.

Suggested Citation

  • Michael Troilo & Nick Freeman & Masato Abe, 2025. "Policies to Address Supply-side Issues in MSME Finance: A Global Compilation," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 34(1), pages 7-32, February.
    • Handle: RePEc:sae:jouent:v:34:y:2025:i:1:p:7-32
    DOI: 10.1177/09713557251315238
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    References listed on IDEAS

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    1. World Bank, 2020. "Leveraging Islamic Fintech to Improve Financial Inclusion," World Bank Publications - Reports 34520, The World Bank Group.
    2. Ammar Ali Gull & Rizwan Mushtaq & Duc Khuong Nguyen & Phuong Tra Tran, 2024. "COVID-19 adaptive strategy and SMEs’ access to finance," Applied Economics, Taylor & Francis Journals, vol. 56(22), pages 2615-2628, May.
    3. Savita Shankar, 2019. "The Role of Credit Rating Agencies in Addressing Gaps in Micro and Small Enterprise Financing: The Case of India," ADBI Working Papers 931, Asian Development Bank Institute.
    4. Joseph Crawford & Zi-Ying Anna Cui & David Kewley, 2024. "Government finance, loans, and guarantees for small and medium enterprises (SMEs) (2000–2021): A systematic review," Journal of Small Business Management, Taylor & Francis Journals, vol. 62(5), pages 2607-2637, September.
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