In 2020 the priority for the Global Partnership for Financial Inclusion (GPFI), under the Saudi G20 Presidency, is to leverage new technologies to boost financial access for youth, women, and small and medium enterprises (SMEs). This is a stock-take report that focuses on digital financial services and products for SMEs. Building on the work done under previous G20 Presidencies and GPFI partners,d the report provides an overview of innovative approaches and digital financial products/services that have been developed in G20 and non-G20 countries to address the SME financing gap, highlighting the Middle East and North Africa (MENA) region. It also highlights policy, regulatory, and supervisory considerations and approaches aimed at facilitating and promoting SME digitalization of financing and concludes with policy options to increase SME access to and use of digital financial services. This report is targeted to mid-level and senior national and state officials; central bank officials; payment service providers (PSPs); financial service providers, and business associations that aim to support increasing access to responsible finance to SMEs.
SMEs are a major driver of job creation and economic activity in most developing and developed economies. Although precise numbers are hard to establish due to the fragmented nature of the global data and varying definitions of SMEs, formal and informal SMEs account for between 60 percent to 70 percent of the gross domestic product (GDP) of low-income, middle-income, and high-income countries.2 They represent more than 90 percent of all businesses and provide more than 50 percent of employment worldwide.
However, lack of access to finance is a critical barrier to growth for SMEs globally. Among the reasons are higher cost to serve SMEs; information asymmetries, or the absence of traditional data used by banks to assess creditworthiness; lack of collateral; and onerous documentation requirements.
Find the full report: https://www.gpfi.org/sites/gpfi/files/saudi_digitalSME.pdf