Financing SMEs and Entrepreneurs 2014: An OECD Scoreboard (Forthcoming)
Small and medium-sized enterprises (SMEs) and entrepreneurs are crucial for tracing new paths to more sustainable and inclusive growth, thanks to their role in developing and diffusing innovation and providing employment. However, they can only fulfill this role if they obtain the finance necessary to start and grow their business. Access to finance represents one of the most significant challenges for these firms, which the recent financial and economic crisis has exacerbated in many countries. Addressing this recurrent structural problem is imperative in order to improve the well-being of societies.
Financing SMEs and Entrepreneurs 2014: An OECD Scoreboard analyses trends in access to finance over the period 2007-2012, based on annual and quarterly data from central banks and national statistical agencies. It contains a thematic chapter on alternative financing instruments for SMEs and entrepreneurs, with a focus on mezzanine finance.
ADB–OECD Study on Enhancing Financial accessibility for SMEs: Lessons from Recent Crises
SMEs comprise the overwhelming majority of firms in almost all countries, and contribute to at least two thirds of total employment. New firms in any year account for around 5 per cent of all jobs in that year. As well as creating jobs, SMEs and entrepreneurs drive economic growth through their contribution to innovation and productivity growth.
However, access to finance is a major barrier to SMEs and entrepreneurs, who consistently report problems in obtaining external financing. In part, this is because these businesses seek small scale lending, which might not compensate banks for their monitoring and screening costs. Unproven business models also make new entrepreneurs relatively risky. Lack of collateral, demand for longer maturities, and information opacity strengthen the magnitude of the problem.