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Financing SMEs in Africa: Rethinking the Role of Development Finance Institutions

Author

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  • Florian Léon

    (FERDI - Fondation pour les Etudes et Recherches sur le Développement International)

Abstract

In Africa, small and medium-sized enterprises (SMEs) face a chronic financing gap that hinders their growth and the continent's economic development. Development Finance Institutions (DFIs) are often seen as a solution to bridge this gap, particularly through indirect support to local banks. However, an in-depth analysis of their impact reveals mixed results. While targeted beneficiaries benefit from these programs, it is at the expense of other borrowers. There is a need to rethink the support for these DFI-intermediated financing schemes aimed at supporting the SME sector.

Suggested Citation

  • Florian Léon, 2025. "Financing SMEs in Africa: Rethinking the Role of Development Finance Institutions," Post-Print hal-05026886, HAL.
    • Handle: RePEc:hal:journl:hal-05026886
    Note: View the original document on HAL open archive server: https://hal.science/hal-05026886v1
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    References listed on IDEAS

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