Access to finance for SMEs in least developed countries: Focus on technology-based firms and women-led SMEs
Programs and partnerships
Access to finance by small and medium-sized enterprises (SMEs) is a key determinant of their ability to drive innovation and structural transformation for socio-economic development.Read more
Access to finance by small and medium-sized enterprises (SMEs) is a key determinant of their ability to drive innovation and structural transformation for socio-economic development. Governments have supported numerous initiatives to develop and grow the SME sector, and research on those programs has played an important role in understanding their impact and in influencing their design.
This research project will investigate initiatives that promote SME development in least developed countries (LDCs), where the benefits of SME development and growth are greatly needed. The research seeks to highlight two aspects of SME development and growth programs: the sectoral composition of SME support, with a particular interest in the technology sector; and the gendered distribution of support, with an interest in understanding how inclusive policy instruments are for women. The results of this study will illustrate the state of practice and research on SME support programs and the role of women-led technology-driven SMEs where data exists.
The research used a mixed methods approach, combining bibliometric analysis of publications on small and medium enterprise (SME) development/entrepreneurship in least developed countries (LDCs), with qualitative case studies in four select LDCs. These examined policies and programs promoting SME development. The bibliometric analysis examined publications listed in the Scopus and EBSCO databases from 2010 to 2019. The focal case study countries were Bangladesh, Cambodia, Ethiopia and Senegal. There is limited access to finance; business environments are not well aligned to the needs of SMEs and start-ups; there is a lack of skilled human resources, and limited coordination and integration with entrepreneurship ecosystems.
The presentation provides an overview of current research and literature on various themes of small and medium enterprise (SME) development in least developed countries such as Bangladesh, Yemen, Rwanda, Malawi, Nepal, Afghanistan, Lesotho and others. Some themes are: technology, gender, entrepreneurship, innovation initiatives, financial inclusion, donors, research needs.
Small and medium enterprises (SME) and entrepreneurship development are highly context-dependent. The culture of entrepreneurship differs among countries; institutional structure and the wider environment for business development is diverse across nations. This project examines the state of research on SME and entrepreneurship in the least developed countries (LDCs), combined with case studies in four LDCs in Africa and Asia. By looking at publications per year it becomes evident how few publications focus on entrepreneurship and SME development in LDCs. Having better baseline data on current status and sex disaggregated data could help identify areas needing attention, and assist in tracking development.
This brief presentation focuses on research that examines and contrasts how four countries emphasize development on three fronts: 1) Promoting the development of small and medium-sized enterprises (SMEs) in general 2) Bolstering information and communication technologies as a part of their SME development 3) Stimulating women’s entrepreneurship. Results include providing information on accelerators in the entrepreneurship ecosystem, donors, and challenges for inclusive development. Appropriate financing and financing mechanisms are seen as a bottleneck to women’s advancement.
The project examined policies to promote small and medium enterprises (SME) development in general in four case study countries: Bangladesh, Cambodia, Ethiopia and Senegal, in addition to analysing their emphasis on promoting women entrepreneurs and technology-based firms. The report summarises main government policies that have promoted development on three fronts: entrepreneurship; gender; technology. It details efforts by governments, donors/multilaterals, and other public and private sector organisations in each country to build entrepreneurship ecosystems. The report argues that all of the study countries have expended effort to build entrepreneurship ecosystems, which other least developed countries (LDCs) can learn from.