What's Happening in the Missing Middle? Lessons from Financing SMEs

Small and medium enterprises (SMEs) are the economic backbone of virtually every economy in the world. SMEs represent more than 95% of registered firms worldwide, account for more than 50% of jobs, and contribute more than 35% of Gross Domestic Product (GDP) in many emerging markets.

Small businesses generate most of the new jobs, and help diversify a country’s economic base. They also promote innovation, help deliver goods and services, and can be a powerful force for integrating women and youth into the economic mainstream.

Yet despite all these benefits, small enterprises remain significantly underserved by financial institutions. Research indicates that the credit gap that formal SMEs confront is about $1 trillion. In an effort to bridge this financing gap, the World Bank Group (WBG) is working to help provide support to SMEs. The newly published What's Happening in the Missing Middle? Lessons from Financing SMEs shares WBG's experience working with SMEs, explores policies and frameworks to support SMEs, analyzes innovations in SME finance, and describes some country specific examples.

Lessons from Financing SMEs

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