The chapter details the OECD strategy to obtain comprehensive data on access to finance at the subnational level from official sources within the flagship publication Financing SMEs and Entrepreneurs: An OECD Scoreboard and discusses the main indicators collected for large (TL2) regions and several countries.
Boosting Business in Regions
Easing Administrative Burdens and Financing Constraints
Abstract
Better data is crucial for understanding how access to finance varies across regions
In 2022, the OECD initiated a pilot project to extend the Scoreboard on Financing SMEs and Entrepreneurs to include subnational data. The project collects official indicators of access to finance at the subnational level, namely TL2 (large regions). Around three-quarters of these indicators focus on debt finance, as this is the main source of external finance for SMEs. Even in a country with developed equity finance, such as the United Kingdom, the amount of venture and growth capital was only a fraction (1%) of the sum of outstanding business loans. The debt-related indicators collected during the pilot project include the prevalence of different types of debt finance and the financing conditions, as well as government programmes such as subsidised loans or government loan guarantees. Other indicators are related to government programmes such as grant guarantees or measures of enterprise distress, e.g. SME bankruptcies and payment delays.
Data on subnational indicators of access to finance are sparse, and further efforts are required to improve coverage. In 2022, only 12 of the 48 countries present in the national version of the Scoreboard were able to provide subnational breakdowns for at least one indicator.
There is limited information about financing conditions at the subnational level across EU and OECD countries. The OECD has sought to fill the gap in the subnational information about firm financing through a data collection initiative that builds on the experience of the OECD flagship publication Financing SMEs and Entrepreneurs: An OECD Scoreboard. The Scoreboard has monitored SME financing trends and policies at the national level for over a decade and it is a vital source of information about firm financing from an international perspective. The new data collection initiative extends the Scoreboard to include subnational breakdowns for existing indicators, as well as new indicators relevant to subnational analysis. This data collection initiative responds to a growing demand by policymakers for more disaggregated data to be able to design better-evidenced policies and evaluate them better over time. This demand is also reflected in the 2022 Updated G20/OECD High-Level Principles on SME Financing, which were welcomed by G20 Leaders in November 2022 and whose first principle calls for improving the evidence base on SME financing, including through a more widespread disaggregated data collection by region and gender of the business owner, among others (OECD, 2022[1]).1
Building on its network of country experts, the OECD started in 2022 the first subnational data collection exercise of the Scoreboard. In addition to covering all core indicators of the national Scoreboard, the exercise also aimed to cover additional indicators that were deemed relevant for the subnational dimension of access to finance, such as the number of bank branches in a region. The pilot maintains the principles behind the data collection process of the Scoreboard, which rests on the collaboration between the OECD secretariat and national experts from ministries of finance and central banks (see Box 4.1 for more details).2
The OECD Scoreboard on Financing SMEs and Entrepreneurs is a biennial publication of the OECD. First published in 2012, this flagship publication has become an international reference for monitoring developments and trends in SME and entrepreneurship finance. It was an annual publication until 2020, but its cadence has become biennial since then. In the intervening years, a shorter policy highlights version of the Scoreboard was released.
In the past, the Scoreboard has contributed to the work of the G7 and the G20, via the G20 Global Partnership on Financial Inclusion (GPFI) and the Infrastructure and Investment Working Group. It also supports the implementation of the G20/OECD High-Level Principles on SME Financing, which were first released in 2015 and updated in 2022. The Principles have been embodied in an official OECD Recommendation on SME Financing since June 2022. Furthermore, the Financial Stability Board has drawn on the Scoreboard indicators to evaluate the impact of global financial reforms on SME finance.
The Scoreboard is produced by the OECD Secretariat in close consultation with national experts from government institutions and central banks, who provide information on core indicators and current SME financing policies in their respective countries. The data collection process and publication are guided and overseen by the OECD Committee on SMEs and Entrepreneurship (CSMEE) through the Informal Steering Group on SME and Entrepreneurship Financing.
Since 2012, the Scoreboard’s country coverage has expanded significantly, from 11 countries in the first pilot exercise to 48 countries in the 2022 edition, of which 34 OECD members. Statistical coverage has also improved, going beyond traditional bank loans to cover asset-based finance, equity finance and enterprise distress indicators (e.g. bankruptcies and payment delays).
The Scoreboard data collection process has been conducted at the national and economy-wide level until 2022. However, there is an increasing demand from policymakers for more disaggregated information, notably by region and gender of the business owner, to design better-evidenced policies. The project “Boosting business in regions” helps address this demand by supporting the first subnational data collection process of the Scoreboard.
Note: The full list of Scoreboard reports is available at the following link: https://www.oecd-ilibrary.org/industry-and-services/financing-smes-and-entrepreneurs_23065265
Most indicators in the pilot project fall under the category of debt finance, which continues to be by far the main source of external finance for SMEs (for the full list of indicators, see Figure 4.1). By way of example, even in a country like the United Kingdom, where equity finance is relatively developed, outstanding business loans averaged GBP 470 billion over the period 2011-2020, while venture and growth capital were only GBP 4.7 billion, i.e. about 1% of outstanding business loans (OECD, 2022[2]).
At the same time, alternative sources of finance, such as equity finance and asset-based finance, are also important, as there is an increasing recognition that SMEs need to move away from a debt culture to finance their growth (OECD, 2015[3]). This has become even more compelling after the COVID-19 crisis, which has caused a further increase in the average indebtedness of SMEs across most OECD countries (OECD, 2021[4]). In addition, it is also important to monitor enterprise distress indicators, such as the number of bankruptcies and payment delays, which are closely linked to the stability of the financial sector and also tend to vary at the subnational level. For example, there is evidence that the rate of nonperforming loans in southern Italy is much higher than the national average (i.e. 13 percentage points higher in 2015) (European Commission, 2017[5]).
The rest of this section explains what each indicator can reveal about business financing conditions at the regional level and why it is important to collect such information more systemically across countries and over time. It then concludes with the coverage of the data obtained through the pilot project.
Note: Indicators in italics are new indicators that had never been collected before at the national level.
Source: Core indicators of Financing SMEs and Entrepreneurs: An OECD Scoreboard.
Debt finance (demand and supply) indicators
Outstanding business loans (total & SMEs)
Outstanding business loans (total) is a stock indicator that measures the value of total business loans (i.e. loans, overdrafts, credit lines) in the economy at any given point in time. It includes both new business loans and pre-existing loans. This indicator is generally pro-cyclical, with volumes growing during expansion phases and receding during downturns. Public policies may also affect this indicator, for example, when they act in a countercyclical way to support business lending during recessions, as happened during the recent COVID-19 crisis (OECD, 2022[2]). Credit market conditions, such as the level of competition in the banking sector, may also have an impact on this indicator, as noted in previous chapters.
At the subnational level, this indicator will be influenced, among other factors, by the total number of businesses, the average firm size and the overall affluence of the region. As a result, placing this indicator in a statistical relation with these variables can point to regions where the credit offer is at a lower or higher level than expected, thus supporting policymakers in the identification of regions where stronger policy attention is needed.
The SME variant of this indicator (SME outstanding business loans) will naturally reflect the definition of SME loan, which is not the same across different countries. For example, even at the EU level, Italy’s Central Bank defines SME loans as loans to companies employing fewer than 20 people, France’s Central Bank as loans to companies employing less than 250 people and the Dutch Central Bank as loans up to EUR 1 million. Some central banks (e.g. Italy) also consider sole proprietorship as a stand-alone category.
Outstanding SME loans show the propensity of the banking sector to lend to SMEs and, accordingly, the exposure of commercial banks to the domestic SME sector.3 This indicator is directly affected by the size of the SME sector in a given country, the SME loan definition (i.e. the broader the definition, the larger the volume of outstanding SME loans), as well as the overall financing conditions in credit markets, such as average interest rates, loan maturities, collateral requirements and public financing policies (e.g. loan guarantees and interest rate subsidies).
At the subnational level, this indicator, especially in relation to aggregate indicators such as GDP, value added or total number of businesses, can point to regions where SME lending is weaker than elsewhere (also in relation to the national average), thus helping policymakers identify credit-constrained regions.
New business loans (total & SMEs)
While outstanding business loans are a stock indicator, new business loans are a flow indicator. This indicator is typically one of the first to contract during a recession and one of the first to grow in a new phase of expansion4. Policymakers can, therefore, use this indicator to track how credit markets react to the economic cycle or other external factors, such as increases in the policy interest rate by the Central Bank or increased taxation of the banking sector.
Collecting this indicator both for total business loans and SME loans allows policymakers to appreciate whether trends in new SME lending diverge from total business lending. Similarly, at the subnational level, this indicator allows policymakers to understand how different regional credit markets react to the economic cycle or other external factors.
Share of SMEs applying for a loan
This indicator shows the share of SMEs in the total business population that applies for a loan. It is influenced by macroeconomic conditions, the structure of the banking sector (i.e. the degree of competition) and firm-specific variables (i.e. age, size, sector, etc.). For example, during economic slumps, without adequate policy interventions, SMEs are generally reluctant to apply for credit both because demand is low and because deteriorated conditions often induce lenders to tighten credit conditions. More competition in the banking sector, on the other hand, is expected to lead to a greater share of SMEs applying for a loan via the channel of better credit conditions, including lower interest rates (see above). Firm-specific variables also matter. Broadly speaking, larger and more mature SMEs are more likely to apply for a loan, as are manufacturing SMEs, which tend to have more (measurable) collateral than services-based firms. Finally, this indicator is also affected by other factors, such as the presence of so-called “discouraged borrowers” (i.e. creditworthy firms that need credit but choose not to apply because they reckon that their application would be rejected) (Kon and Storey, 2003[6]; Mac an Bhaird, Vidal and Lucey, 2016[7]) and firms that do not need a loan because they do not intend to grow (i.e. lifestyle entrepreneurs) and/or manage well their cashflow. It follows that this indicator should be examined together with others to better assess financing conditions at the regional level.
Rejection rate (SME loans)
This indicator is given by the following ratio:
The main benefit of this indicator is that it gives a picture of the perceived risk associated with SME lending in the banking sector, which varies across places and over time. One limitation is that it omits “discouraged borrowers” (see above), resulting in a lower rejection rate than if this category were to be included. Borrower discouragement, which is difficult to properly measure, has been found to be more prominent among certain groups, such as those underrepresented in the entrepreneurial population (e.g. women, youth and migrants) (OECD/European Commission, 2021[8]) but also among innovative enterprises (Brown, Liñares-Zegarra and Wilson, 2022[9]).
Utilisation rate (SME loans)
This indicator is given by the following ratio:
Some countries use this indicator instead of the previous indicator (rejection rate). It shows the extent to which credit authorised by banks is being used by SMEs. A decrease in this ratio indicates that credit conditions are loosening because not all authorised credit is being used.
Number of bank branches
This is one of the new indicators that had never been collected by the national Scoreboard exercise. The number of bank branches at the local level can indicate the degree of banking sector competition, which, as noted earlier, can affect financing opportunities for SMEs. In addition, as seen earlier, the distance between bank branches and clients, as well as the distance between bank branches and bank headquarters, matters in access to finance, which suggests that the number of bank branches can effectively influence enterprise financing at the local level. For example, in the context of Sweden, Backman and Wallin (2018[10]) find that both longer distances to the nearest bank and fewer banks in the vicinity are related to experiencing greater difficulties experienced by companies to obtain external capital to finance innovation. Information on the number of bank branches at the local level is expected to offer a good proxy for competition in the banking sector since the greater the number of bank branches, the more likely different types of banks (e.g. nationwide banks, regional banks, cooperative banks, etc.) are locally available, strengthening the offer of credit products and credit conditions.
Debt finance (price and type) indicators
SME loan maturity (%) (short-term vs. long-term)
Across EU countries, short-term loans are generally those with a maturity of below one year (e.g. Italy and France), although there are some exceptions.5 Short-term loans are generally used to support cash-flow management. This makes them especially important for SMEs, which are more likely than larger companies to experience payment delays. However, too high a rate of short-term loans, for example, above 50%, may suggest a lack of long-term credit for investment, which can be due to short-termism prevailing in the banking system or to uncertain macroeconomic conditions. At the local level, this indicator can show regions where the proportion of short-term loans is too high, pointing to a lack of long-term credit for SME investment. Over time, this indicator can also help assess if the growth in short-term loans can support an eventual increase in the local stock of companies. In other words, a reduction in the volume of short-term loans in the face of a stable or growing business population might suggest cash-flow problems for local SMEs.
Long-term loans are generally defined in contrast to short-term loans; thus, in most EU countries, they are business loans with an initial maturity of one year or longer. Long-term loans are mostly used to finance business investments. A high share of long-term loans in the total of SME loans is generally considered favourable because it can support business investments. At the subnational level, it is especially important for peripheral regions that are far away from the main national hubs of equity finance.
Interest rates (average) (SMEs vs. large firms)
Interest rates (i.e. the cost of debt for borrowers and the rate of return for lenders) reflect credit market conditions, such as the degree of competition in the banking sector and the average quality of borrowers, as well as macroeconomic conditions, such as the inflation rate and the policy interest rate of the central bank. Credit interest rates are, on average, higher for SMEs than for larger companies due to the average higher risk associated with SME borrowers. Interest rates also vary across regions, with lagging regions showing, on average, higher interest rates than leading regions (see above).
The interest rate spread gauges the difference between the average interest rate applied to SMEs and larger companies and is a measure of the disadvantage that SMEs experience in credit markets compared to larger companies. It follows that subnational analysis of this indicator allows us to see in which regions SMEs face a higher credit risk premium compared to larger companies.
Collateralised loans (% of SME loans)
Collateralisation refers to the use of the borrower’s assets to secure a loan, with those assets that, in case of loan default, are seized and sold by the lender to partly cover its losses. By reducing the risk related to the event of a loan default, collateralised loans have lower interest rates than uncollateralised ones and can support access to finance for enterprises that do not have a strong credit history or which do not keep detailed financial accounts. This is especially true for over-collateralised loans, which are loans with a collateralisation ratio (i.e. collateral value divided by loan value) above 1, which command better credit conditions than under-collateralised loans. However, as discussed in the first section of this chapter, collateralisation is also fraught with problems. The use of collateral imposes opportunity costs for borrowers, as it ties up assets that might be put to better use, while the transfer of control over assets involves significant transaction costs.
This indicator is based on enterprise surveys and shows the proportion of SME loans that have required the pledge of collateral. Thus, it does not show the details of the collateralisation process, for example, the extent to which loans are over- or under-collateralised. A high rate of collateralised loans can be a sign of tight credit conditions, suggesting that banks find it too risky to lend to SMEs without collateral. However, as noted earlier, collateralised loans can represent an opportunity for SMEs to receive credit at better conditions than they would otherwise be able to obtain. Policies can also influence the share of collateralised loans; for example, loan guarantees can reduce the need for banks to secure loans through collateral. Thus, similar to other indicators, this indicator would best be used in combination with others to properly assess credit conditions at the regional level.
Government programme indicators
Government loan guarantees (SMEs)
Government loan guarantees are one of the most common policy tools to support SME financing, especially at the regional level, where locally-based mutual guarantee societies (MGS) can play an important role through the provision of guarantees and counter-guarantees. This explains why loan guarantees are one of the two policy instruments, together with public financial institutions, which are more closely analysed in the policy section of this chapter (see below). By covering part of the bank losses in case of loan default, loan guarantees reduce the lending risk for banks, although it is generally accepted that banks still carry at least 20% of such risk in normal times; hence, the common coverage ratio of 80% in many guarantee programmes. The use of loan guarantees has further expanded during the COVID-19 crisis, when many governments have used this instrument to inject liquidity into the economy and help SMEs with the economic consequences of the pandemic (see policy section for more details).
At national and subnational levels, this indicator shows the government's commitment to supporting SME lending, as banks largely use guarantees to cover SME loans. However, this indicator may also be affected by other variables, such as the overall size and performance of the SME sector, the general propensity of the domestic banking sector to lend to SMEs and the concurrent presence of other policies (e.g. interest-rate subsidies) which may make public guarantees less needed.
Like other volume statistics, this indicator is best understood when it is linked to other volume indicators, such as SME outstanding loans, gross domestic product (GDP) or total business population. At the regional level, one could expect the incidence of government loan guarantees (e.g. in relation to total SME loans) to be stronger in lagging regions where banks are less inclined to lend to SMEs, but this may not be the case in contexts where banks are particularly risk-averse. Regional analysis of loan guarantees can, therefore, be particularly insightful on whether this public policy instrument is properly addressing existing market failures.
Government-guaranteed loans (SMEs)
Government-guaranteed loans point to the volume of total loans which are backed by a public guarantee. It follows that the ratio between this indicator and the previous one provides the leverage ratio of public loan guarantees, i.e. how much additional private credit public guarantees can mobilise. This leverage ratio is expected to be higher in better-off regions, where small guarantee volumes should free up larger additional credit resources for SMEs and conversely lower in worse-off regions, where the same volume of additional credit will demand higher public guarantees.
Direct government loans (SMEs)
Direct government loans are disbursed by public financial institutions to SMEs with better credit conditions (e.g. interest rates, loan maturity, etc.) than those available from commercial banks (see also policy section of this chapter). Public microcredit programmes, for example, will fall under this category. Government loans generally target disadvantaged groups in the entrepreneurial population, such as women, youth and minorities, but they can also be used to finance other business profiles that find it difficult to receive bank credit, such as small innovative businesses.
The regional distribution of direct government loans can indicate national policy priorities, especially when this indicator is compared to other regional business activity indicators (e.g. gross value added and employment). This indicator could also point to industrial priorities if there are strong sector specialisations at the regional level.
Public grants (SMEs)
Like government loans, public grants are disbursed by public financial institutions, whose role is discussed in greater detail in the policy section of this chapter. Grants, which are generally of small size, are often used to support socially inclusive entrepreneurship. Another common type of grant is R&D and innovation grants, which target knowledge-based SMEs. The regional distribution of public grants will reflect how this instrument is used at the national level. If grants are mostly used to encourage social inclusion through business creation, they will be prevalent in lagging regions, whereas the opposite will be true if they are mostly used to support R&D and innovation.
Alternative sources of finance indicators
Venture capital investments
Venture capital (VC) investment is the most prominent type of equity finance and is meant to fuel the expansion of innovative start-ups and growth-oriented SMEs. However, as noted earlier, VC tends to be geographically concentrated in a few places, whereas there is strong evidence that high-growth firms (HGFs) are much more dispersed and also found in peripheral regions (OECD, 2021[11]). As such, the geographical concentration of VC may pose a problem for the sustainable expansion of high-growth firms in regions located away from VC centres. This is even more paradoxical because there is evidence from the United States that it is not non-local investments that drive the outperformance of VC firms in the main VC centres (Chen et al., 2010[12]).
This indicator will present information on VC investments across regions, thus showing the extent to which VC is regionally concentrated at the national level. In both absolute and relative terms, VC investments are expected to be larger in leading regions. In this respect, it is also important to note that many countries still have very thin VC markets, with small regional investment volumes regardless of the region’s profile.
Leasing
Leasing is a rental agreement between three actors – i.e. the company borrowing an asset, the company lending it and a financial institution acting as intermediary – which allows a business to enjoy the property of an asset for a certain period without owning it. The fixed-term contract includes one of the following three options at the end of the rental period: purchase of the asset, return of the asset or extension of the contract.
The regional distribution of leasing volumes will indicate the sophistication of local enterprise financing markets, keeping in mind that leasing is pro-cyclical (OECD, 2023[13]) and is expected to be stronger in wealthier regions.
Factoring
Factoring – also known as “invoice discounting” or “accounts receivable financing” – consists of the sale of a firm’s accounts receivable to a third party, known as the factor, at a discounted price. The factor assumes the credit risk associated with the accounts receivable. The value of the discount will depend on the creditworthiness of the firm’s customers. The main advantage from the perspective of the company selling its invoices is immediate access to working capital, although at a discounted price than if it were to collect all invoices from the original creditors. For this reason, factoring is generally considered an expensive instrument to finance working capital.
The distribution of factoring at the regional level can provide insights into the sophistication of local enterprise financing markets. Like leasing, factoring is also expected to be mostly pro-cyclical, although there could also be an acceleration in its use during downturns if companies struggle with meeting cash-flow requirements. Factoring is also likely to be influenced by the size of the SME sector. Large companies are, in fact, less likely to use factoring services as they have stronger cash buffers as well as dedicated accounting and legal departments to collect invoices from late payers.6
Enterprise distress indicators
Non-performing loans (%) (total and SME)
According to European Central Bank (ECB) regulations, nonperforming loans (NPLs) are loans for which more than 90 days have elapsed without borrowers paying an instalment (or if there are other clear signs that the loan will not be repaid). NPLs are a sign of distress not only for the business sector but also for the financial sector since banks need to set more capital aside in the expectation of future losses to preserve their capital adequacy ratio.
This indicator measures the percentage of NPLs in total/SME loans. At the subnational level, it is expected to be higher in lagging regions and to affect the local average interest rate of business loans by influencing the risk associated with (small) business lending.
Delays in business-to-business payments (average days)
Payment delays harm the business cash flow and are a special concern for SMEs, which have thinner cash buffers than larger companies. Payment delays are also one of the reasons why SMEs may want to use factoring to accelerate the payment of receivables. At the same time, (reasonable) payment delays are an essential component of trade credit and supply-chain finance, whereby companies wait to be paid by buyers before they pay their suppliers (Wu, Lee and Birge, 2020[14]).
“Payment delays” are measured in terms of the average number of days and cover only business-to-business (B2B) transactions. At the EU level, based on EU Directive 2011/7, public authorities are requested to pay suppliers within 30 days or, in very exceptional circumstances, 60 days. As to B2B transactions, enterprises are requested to pay within 60 days, unless they expressly agree otherwise and provided that the contract terms are not grossly unfair to one party.
At the subnational level, this indicator is likely to reflect regional differences in income per capita and point to regions where SMEs are more likely to face cash-flow problems and where, accordingly, certain instruments such as factoring are more likely to be used.
SME bankruptcies (number)
Bankruptcy refers to the legal proceeding involving a business that is unable to repay its outstanding debts. The number of bankruptcies in a given location is affected by macroeconomic conditions, but also by the overall quality of the insolvency legal framework (e.g. the average duration of an insolvency procedure, the availability of out-of-court settlement procedures, the strength of creditors’ rights in re-organization plans) and the propensity of the banking sector to extend doubtful loans not to write them off from their balance sheets7.
Even with these limitations, the number of bankruptcies (generally in relation to the number of total businesses) can point to regions where the economy is experiencing troubles and where tight credit market conditions are to be expected in the future. In addition, a low number of bankruptcies in regions where the proportion of NPLs is high might suggest that banks are reluctant to write off doubtful loans.
Data coverage of the subnational Scoreboard pilot exercise
The subnational data collection process was conducted in the second half of 2022 and covered the year 2021.8 Although the national version of the Scoreboard included data from 48 countries in its 2022 edition (OECD, 2022[15]), subnational breakdowns were available for fewer than 12 countries for most indicators as the overview of the responses that the OECD has received from national experts at the TL2 (large) regional level shows. Overall, twenty of the forty-eight Scoreboard countries (i.e. 40%) collect at least one SME finance indicator at the subnational level, although only four collect more than 10 (Italy and Portugal among OECD members and Indonesia and Peru among non-OECD members) (Figure 4.2). Another three countries were able to provide information on 8-9 subnational indicators, while five countries shared information on 5-6 indicators. The remaining eight countries had information on fewer than 5 indicators at the subnational level. When it comes to the type of indicators, debt finance indicators (e.g. outstanding loans and SME loans, direct loans, government loan guarantees and government-guaranteed loans, among others) were the most covered at the subnational level. Specifically, the amount of government loan guarantees to SMEs is the indicator available in most countries at the regional level, with a coverage of 12 countries, followed by government guaranteed loans, SME bankruptcies and outstanding SME loans, available for ten countries each (Figure 4.3). All other indicators are available for fewer than ten countries, and some, such as public grants, are not available at the regional level for any country.9
Number of indicators available by country within the 2022 Scoreboard subnational indicators
Note: Data collection in 2022, referring to 2021 or the latest available year.
Source: Responses by national experts to the 2022 Scoreboard data collection process.
Number of OECD and non-OECD countries for which each indicator is available within the 2022 Scoreboard subnational indicators
Note: Data collection in 2022, referring to 2021 or the latest available year.
Source: Responses by national experts to the 2022 Scoreboard data collection process.
References
[10] Backman, M. and T. Wallin (2018), “Access to banks and external capital acquisition: perceived innovation obstacles”, The Annals of Regional Science, Vol. 61/1, pp. 161-187, https://doi.org/10.1007/s00168-018-0863-8.
[9] Brown, R., J. Liñares-Zegarra and J. Wilson (2022), “Innovation and borrower discouragement in SMEs”, Small Business Economics, Vol. 59/4, pp. 1489-1517, https://doi.org/10.1007/s11187-021-00587-1.
[12] Chen, H. et al. (2010), “Buy local? The geography of venture capital”, Journal of Urban Economics, Vol. 67/1, pp. 90-102, https://doi.org/10.1016/j.jue.2009.09.013.
[5] European Commission (2017), Economic Challenges of Lagging Regions.
[6] Kon, Y. and D. Storey (2003), , Small Business Economics, Vol. 21/1, pp. 37-49, https://doi.org/10.1023/a:1024447603600.
[7] Mac an Bhaird, C., J. Vidal and B. Lucey (2016), “Discouraged borrowers: Evidence for Eurozone SMEs”, Journal of International Financial Markets, Institutions and Money, Vol. 44, pp. 46-55, https://doi.org/10.1016/j.intfin.2016.04.009.
[13] OECD (2023), “OECD Financing SMEs and Entrepreneurs Scoreboard: 2023 Highlights”, No. 36, OECD SME and Entrepreneurship Papers, Paris.
[1] OECD (2022), 2022 Updated G20/OECD High-Level Principles on SME Financing, OECD , Paris.
[2] OECD (2022), Financing SMEs and Entrepreneurs 2022: An OECD Scoreboard, OECD Publishing, Paris.
[15] OECD (2022), Financing SMEs and Entrepreneurs 2022: An OECD Scoreboard, OECD Publishing, Paris, https://doi.org/10.1787/e9073a0f-en.
[4] OECD (2021), OECD SME and Entrepreneurship Outlook 2021, OECD Publishing, Paris, https://doi.org/10.1787/97a5bbfe-en.
[11] OECD (2021), Understanding Firm Growth: Helping SMEs Scale Up, OECD Studies on SMEs and Entrepreneurship, OECD Publishing, Paris, https://doi.org/10.1787/fc60b04c-en.
[3] OECD (2015), New Approaches to SME and Entrepreneurship Financing: Broadening the Range of Instruments, OECD Publishing, Paris, https://doi.org/10.1787/9789264240957-en.
[8] OECD/European Commission (2021), The Missing Entrepreneurs 2021: Policies for Inclusive Entrepreneurship and Self-Employment, OECD Publishing, Paris, https://doi.org/10.1787/71b7a9bb-en.
[14] Wu, J., H. Lee and J. Birge (2020), “Trade Credit Late Payment and Industry Structure”, SSRN Electronic Journal, https://doi.org/10.2139/ssrn.3671400.
← 1. The High-Level Principles were approved as the first official OECD Recommendation on SME Financing at the 2023 OECD Ministerial Council Meeting (MCM) (7-8 June 2023).
← 2. Indicators should either be “readily available”, in order not to impose an excessive burden on the experts, or “feasible”, in the sense that it should be possible for the national experts to generate the indicators relatively easily. Therefore, it is possible that additional subnational data is available beyond the data collected in this exercise, but that it was not straightforward for experts to generate additional indicators from the raw data.
← 3. Outstanding business loans generally also include loans from public financial institutions.
← 4. Except if governments intervene massively in credit markets to avoid business closures, as happened at the peak of the COVID-19 crisis in a large number of OECD countries.
← 5. For example, the Danish Central Bank defines short-term loans as loans whose interest rate needs to be adjusted annually or more frequently than annually.
← 6. For example, web sources indicate that the average company using factoring services in the United Kingdom has an annual turnover between GBP 5 million and 10 million: http://www.factoringhelpline.co.uk/factoring/who-uses-factoring-services/
← 7. Banks may have an interest not to write off NPLs from their balance sheet to be able to comply with capital adequacy ratios. As long as a loan is in the balance sheet, it is considered an asset, which is no longer the case once it is written off and no longer expected to be repaid, in which case it becomes a liability.
← 8. Going forward, the data collection process will be repeated every year, with a view to expanding the coverage of both countries and indicators as availability is currently limited at the regional level.
← 9. Public grants and the number of bank branches are novel indicators, not previously collected in the national edition of the Scoreboard.