SME Finance Working Group (SMEFWG) - Alliance for Financial Inclusion

Micro, small and medium enterprises (MSMEs) are the lifeblood of many economies, particularly in developing countries. Globally, they represent about 90 percent of businesses and more than 50 percent of employment. MSMEs also contribute significantly to gross domestic product and exports, making their development a high priority for many governments around the world. The Maputo Accord was endorsed in Maputo Mozambique on SME Financing recognizing the importance of SMEs in driving economic growth, employment creation and contributing to broaden sustainable financial inclusion and reducing poverty at the household level, especially through micro-enterprises. The importance of MSMEs goes beyond conventional economic and social contributions. It is essential to understand their importance and potential contribution to the Sustainable Development Goals (SDGs) and crucial to the “Leaving No One Behind principle” that is central to the 2030 Agenda

AFI’s SME Finance Working Group (SMEFWG)

Created in 2013, AFI’s SME Finance Working Group (SMEFWG) actively shares knowledge and experience that promotes MSME access to finance in the network with the development of policy guidance and in-country implementation. Policy guidance is developed based on member demand and global strategic MSME finance topics, and its outcomes founded in the proven practical national financial policies and action plans of members. These best practices, which can be voluntarily adopted by members within their specific requirements, allow members to improve the existing or create a better financing landscape for MSMEs.

Member
Institutions

Countries

Policy changes

Knowledge products

Chairs & Focal points

Chair

Ismail Adam, Bank of Ghana

Co-Chair I

Saba Assaf, Palestine Monetary Authority

Gender Focal Point Lead

Shareen Farouk Dahab, Central Bank of Egypt

Gender Focal Point Co-Lead

Samuel Tarinda, Reserve Bank of Zimbabwe

Objectives

Exchange knowledge and establish a common understanding of policies that promote tangible access, usage and quality of financial services for MSMEs.

Identify policy frameworks learned from different regions and different actors both from demand- and supply-side involved in spurring the viability and financial inclusion of MSMEs, with a specific but not exclusive focus on financial sector policies.

Member Institutions

Banco Central de Reserva de El Salvador
Banco Central del Paraguay
Banco de Moçambique
Banco Nacional de Angola
Banco Central de São Tomé e Príncipe
Bangko Sentral ng Pilipinas
Bangladesh Bank
Bank Al-Maghrib
Bank Negara Malaysia
Bank of Ghana
Bank of Namibia
Bank of Papua New Guinea
Bank of Sierra Leone
Bank of Tanzania
Bank of Uganda
Bank of Zambia
Banque Centrale des Comores
Banque Centrale de la République de Guinée
Banque Centrale de Mauritanie
Banque Centrale de Tunisie
Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO)
Banque Centrale du Congo
Banque de la République d’Haiti
Banque de la République du Burundi
Central Bank of Armenia
Central Bank of Egypt
Central Bank of Eswatini
Central Bank of Iraq
Central Bank of Jordan
Central Bank of Lesotho
Central Bank of Liberia
Central Bank of Nigeria
Central Bank of Samoa
Central Bank of Seychelles
Central Bank of Solomon Islands
Central Bank of Sri Lanka
Central Bank of Sudan
Central Bank of The Gambia
Central Bank of the Republic of Uzbekistan
Centrale Bank van Suriname
Comisión Nacional de Bancos y Seguros de Honduras
Comisión Nacional Bancaria y de Valores de México (CNBV)
Délégation Générale à l’Entreprenariat Rapide des Femmes et des Jeunes (DER F/J)
Direction Générale du Trésor, Ministère de l’Economie et des Finances, Madagascar
Financial Regulatory Commission of Mongolia
Maldives Monetary Authority
Microcredit Regulatory Authority of Bangladesh
Ministère des Finances et du Budget du Sénégal
Ministère des Finances de la République Tunisienne
Ministry of Finance – Eswatini
Ministry of Finance and National Planning Zambia
Ministry of Finance and Economic Development Zimbabwe
National Bank of Cambodia
National Bank of Rwanda
National Bank of Tajikistan
National Reserve Bank of Tonga
Nepal Rastra Bank
Palestine Monetary Authority
Reserve Bank of Fiji
Reserve Bank of Malawi
Reserve Bank of Vanuatu
Reserve Bank of Zimbabwe
Sacco Societies Regulatory Authority (SASRA) Kenya
Superintendencia de la Economía Popular y Solidaria de Ecuador
Superintendencia de Bancos de la República Dominicana
Superintendencia General de Entidades Financieras de Costa Rica (SUGEF)

Subgroups & Planned Activities

MSME Islamic Finance and Financial Inclusion

Planned deliverable: To develop a Survey Report on Islamic Finance and Financial Inclusion that will provide a general mapping on the state of practice of Islamic Finance among SMEFWG members and understand more specifically how Islamic Finance products/approach are used to mitigate financial inclusion exclusion in member countries.

MSME SME Bank and Credit Bureau

Planned deliverable: To develop special report on SME Bank and Credit Bureau/Registry focusing on the importance, establishment, and uses of these two institutions that will promote access, usage, and provision quality of financial services for MSMEs

MSME Alternative Data for Credit

To identify alternative or non-traditional data in assessing MSME credit worthiness and the use of alternative data for credit scoring to increase inclusion of MSMEs and individuals who do not meet the current traditional requirements for credit scoring and access to credit.

Planned deliverable: To develop a special report.

Transitioning MSMEs to Green (w IGFWG)

To develop a special report titled “’Green Transition Measures for MSMEs”. This report aims to examine the vulnerabilities of MSMEs to climate change and assess the role of financial services in their green transition. Focusing on the gaps in green finance and potential business opportunities for MSMEs in climate change mitigation and adaptation, the study aims to guide policymakers and financial regulators in fostering inclusive green finance.

Maya Declarations

SMEF targets, 10 in total so far, are more focused and direct, with the network leveraging on the lessons of previous targets and progress updates.

Primary thematic area

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Consumer Empowerment  and Market Conduct

Consumer Protection

Financial Literacy and Financial Education

Maya Declaration targets

Completed

In progress

Completion rate

55%

52%

54%

53%

48%

49%

40,1%

38%

39%

44%

46,5%

SMEFWG & Gender

Women-owned enterprises account for over 28 percent of businesses worldwide. Paradoxically, the global MSME finance gap for women is estimated to be valued at $1.7 trillion – amounting to over 6 percent of global GDP, according to this 2017 report.

To this day, women entrepreneurs across the globe have limited access to credit and formal financial services when compared to their male counterparts, due to sustained social, structural, and regulatory barriers. Everything from cultural norms to financial literacy, geography, and demographics continue to stand in the way of their entrepreneurial ambitions.

Policy interventions that harness women’s ability to start, run and expand their own MSMEs are paramount to their success as entrepreneurs and their potential to contribute to countries’ economies.

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