On 13-18 March 2017, the AFI SME Finance (SMEF) Working Group will meet in Mahe, Seychelles to discuss policy conerns with regards to empowering Micro, Small and Medium Enterprises (MSMEs) around the world. 

Showcasing SMEF knowledge products

The 8th SMEF Working Group meeting will present three knowledge products developed in 2016. These reports represent a significant effort from the working group to implement the Denarau Action Plan and integrate gender considerations into financial inclusion policies. Firstly, the case study on expanding women’s financial inclusion in Bangladesh was a product of the 6th SMEF Working Group Meeting in Ulaanbaatar, Mongolia where Bangladesh Bank took the lead in developing a case study to showcase how joint efforts by national financial regulators have positively impacted women’s access to finance in their country; statistics show that 188,233 women-led MSMEs received financing in Bangladesh in 2015 — a sharp increase from the 13,233 women-led MSMEs in 2010.

Secondly, the survey report on SME finance policies for women-owned MSMEs was produced after the adoption of the Denarau Action Plan. This survey showed that women’s financial inclusion was indeed a top priority for many AFI members, and that some countries have taken steps to champion relevant policies and develop concrete measures to ensure greater access to finance for women. Among the barriers identified by the survey report were a lack of collateral, insufficient capacity to manage products and a struggle to adapt to social norms.

Thirdly, the case study on defining MSMEs owned by women and women entrepreneurs was undertaken in response to evidence which showed that a lack of definition of such MSMEs was a hindrance to the financial inclusion of women, and that it was impossible to find a unique universal definition. A first step to addressing this issue was therefore to shape the criteria for such a definition; responses to internal SMEF Working Group surveys showed that the number of employees, sales turnover and asset size were the most common criteria used to define MSMEs. Through the case study, we were also able to deepen our understanding about the definitions used by each region and how these definitions were able to strengthen the legal and contractual status of MSMEs.

Spotlight on Agri-SME Financing

Agri-SME Financing is the latest topic to be adopted by the SMEF Working Group, as members have expressed interest in learning more about the connection between Agri-SME financing and agricultural finance. A survey conducted by the working group showed that the majority of AFI members were already pursuing government interventions in their countries, primarily via policies and regulations. 

Another topic to be addressed are the challenges faced by regulators and policymakers when dealing with such policies. Findings show that a lack of innovation from the supply side is the main problem faced by policymakers in bridging the gap for rural MSME financing. Other problems include a lack of registries for movable assets, as well as a lack of data and credit references.

Broadening the impact of the SMEF Working Group

This working group meeting promises to be an exciting one as the group works to harmonize its efforts to achieve greater collaboration with the Global Partnership for Financial Inclusion (GPFI) and other implementing partners. Indeed, this meeting will feature a policy convergence dialogue with the Co-Chair of the GPFI Sub-Group SME Finance Group (German Presidency), GPFI and the SME Finance Forum. The dialogue aims to also cover topics such as SME Finance Data and Indicators, and Innovative Funding Schemes for Value Chains. In addition, the working group, led by the Ministry of Finance of Swaziland and CNBV Mexico hopes to highlight AFI country experiences and assess the progress of the SME Finance Compact. 

There is much to look forward to here in Mahe, Seychelles as the working group comes together to drive knowledge content production, explore new topics and discuss cross-cutting policy issues with the Consumer Empowerment and Market Conduct (CEMC) Working Group.