Working Paper

Closing the Credit Gap for Formal and Informal Micro, Small, and Medium Enterprises

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collection.link.213
https://openknowledge.worldbank.org/handle/10986/11866
collection.name.213
Other papers
dc.contributor.author
Stein, Peer
dc.contributor.author
Ardic, Oya Pinar
dc.contributor.author
Hommes, Martin
dc.date.accessioned
2015-04-13T18:11:47Z
dc.date.available
2015-04-13T18:11:47Z
dc.date.issued
2013-08
dc.description.abstract
Job creation and economic growth through private sector development have become primary areas of focus for policy makers around the world in the aftermath of the global financial crisis. Recent evidence points to the importance of small and medium enterprises (SMEs) in providing employment across countries. In addition to employing the largest number of people in aggregate, SMEs generate the most new jobs. But SMEs also face many challenges in day-to-day operations and to grow. This note is a report back on the state of the credit gap for MSMEs with this new and updated data, while providing additional focus on the sizable informal enterprise sector in the developing world. In addition, this report examines various operational challenges that small and informal firms face, and some formalization obstacles they often cite as the primary reasons for not registering their business. A framework to differentiate the informal sector is offered, with the intention of segmenting the vast landscape of informal firms some of which exist today due to opportunistic behavior, while others are just trying to survive and to better design specific interventions depending on the stage of development and the willingness of the firm to register its business. The rest of this report is organized as follows. Section I focuses on the credit gap for formal MSMEs, and offers some innovative models and interventions that can be used to more fully meet the financial and non-financial needs of formal MSMEs. Section II focuses exclusively on informal enterprises, and goes beyond the access to finance paradigm, describing the operational challenges faced by informal firms, reviewing the experiments that have tried to induce higher rates of formalization, and looking at a series of private sector models that if combined, could more fully meet the needs of informal firms.
en
dc.identifier
http://documents.worldbank.org/curated/en/2013/01/24162672/closing-credit-gap-formal-informal-micro-small-medium-enterprises
dc.identifier.uri
http://hdl.handle.net/10986/21728
dc.language
English
dc.language.iso
en_US
dc.publisher
International Finance Corporation, Washington, DC
dc.rights
CC BY-NC-ND 3.0 IGO
dc.rights.holder
International Finance Corporation
dc.rights.uri
http://creativecommons.org/licenses/by-nc-nd/3.0/igo/
dc.subject
ACCESS TO BANK ACCOUNTS
dc.subject
ACCESS TO CREDIT
dc.subject
ACCESS TO EDUCATION
dc.subject
ACCESS TO FINANCE
dc.subject
ACCESS TO FINANCIAL SERVICES
dc.subject
ACCESS TO INFORMATION
dc.subject
ACCESS TO MARKET
dc.subject
ACCESS TO MARKETS
dc.subject
ACCESS TO RESOURCES
dc.subject
ACCESSIBILITY
dc.subject
ACCOUNTING
dc.subject
ACCOUNTS RECEIVABLE
dc.subject
ADVISORY SERVICES
dc.subject
AFFILIATES
dc.subject
AGRICULTURAL ACTIVITIES
dc.subject
AVAILABILITY OF CREDIT
dc.subject
BANK ACCOUNT
dc.subject
BANK ACCOUNTS
dc.subject
BANK FINANCING
dc.subject
BANK LENDING
dc.subject
BANKING MODELS
dc.subject
BANKING SECTOR
dc.subject
BANKING SERVICES
dc.subject
BANKS
dc.subject
BORROWER
dc.subject
BRANCH
dc.subject
BRANCH NETWORK
dc.subject
BRIBE
dc.subject
BRIBES
dc.subject
BUSINESS ASSOCIATION
dc.subject
BUSINESS ASSOCIATIONS
dc.subject
BUSINESS ENABLING
dc.subject
BUSINESS ENABLING ENVIRONMENT
dc.subject
BUSINESS OPPORTUNITY
dc.subject
BUSINESS OWNERS
dc.subject
BUSINESS PLAN
dc.subject
CAPACITY BUILDING
dc.subject
CAPITAL LOANS
dc.subject
CAPITAL STOCK
dc.subject
CASH FLOW
dc.subject
CASH FLOWS
dc.subject
CHECKING
dc.subject
CHECKING ACCOUNT
dc.subject
CHECKING ACCOUNTS
dc.subject
COLLATERAL
dc.subject
COLLATERAL REQUIREMENTS
dc.subject
COMMERCIAL BANKING
dc.subject
COMMERCIAL BANKS
dc.subject
COMMERCIAL LOANS
dc.subject
COMPANY
dc.subject
COMPETITORS
dc.subject
CONSULTING SERVICES
dc.subject
CONTRACT ENFORCEMENT
dc.subject
CORPORATION
dc.subject
CORPORATIONS
dc.subject
CORRUPTION
dc.subject
COUNTRY COMPARISONS
dc.subject
CREDIT BUREAUS
dc.subject
CREDIT CONSTRAINT
dc.subject
CREDIT DECISIONS
dc.subject
CREDIT GAP
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CREDIT GUARANTEE
dc.subject
CREDIT HISTORY
dc.subject
CREDIT MARKET
dc.subject
CREDIT RISK
dc.subject
CREDITWORTHINESS
dc.subject
CULTURAL BARRIERS
dc.subject
CUSTOMER BASE
dc.subject
DEMAND FOR CREDIT
dc.subject
DEPOSIT
dc.subject
DEPOSIT ACCOUNT
dc.subject
DEPOSIT PRODUCTS
dc.subject
DEPOSITS
dc.subject
DEVELOPING COUNTRIES
dc.subject
DEVELOPMENT FINANCE
dc.subject
DEVELOPMENT FINANCE INSTITUTIONS
dc.subject
E-LEARNING
dc.subject
ECONOMIC ACTIVITY
dc.subject
ECONOMIC COOPERATION
dc.subject
ECONOMIC DEVELOPMENT
dc.subject
ECONOMIC GROWTH
dc.subject
EMERGING MARKETS
dc.subject
EMPLOYER
dc.subject
EMPLOYERS
dc.subject
EMPLOYMENT GROWTH
dc.subject
EMPLOYMENT OPPORTUNITIES
dc.subject
ENTERPRISE FINANCE
dc.subject
ENTREPRENEUR
dc.subject
ENTREPRENEURIAL ACTIVITY
dc.subject
ENTREPRENEURSHIP
dc.subject
EXCLUSION
dc.subject
EXTERNAL FINANCE
dc.subject
FACILITATION
dc.subject
FINANCE INITIATIVE
dc.subject
FINANCIAL CRISIS
dc.subject
FINANCIAL INFRASTRUCTURE
dc.subject
FINANCIAL INSTITUTION
dc.subject
FINANCIAL INSTITUTIONS
dc.subject
FINANCIAL INTERMEDIARIES
dc.subject
FINANCIAL LITERACY
dc.subject
FINANCIAL MARKETS
dc.subject
FINANCIAL NEEDS
dc.subject
FINANCIAL SERVICES
dc.subject
FINANCIAL SERVICES FOR WOMEN
dc.subject
FINANCIAL SUSTAINABILITY
dc.subject
FINANCING SHORTFALL
dc.subject
FIRMS
dc.subject
FORMAL ECONOMY
dc.subject
FORMAL FINANCIAL SECTOR
dc.subject
FORMAL FINANCIAL SERVICES
dc.subject
GENDER
dc.subject
GENDER EQUALITY
dc.subject
GREATER ACCESS
dc.subject
GUARANTEE SCHEMES
dc.subject
HUMAN CAPITAL
dc.subject
HUSBAND
dc.subject
ID
dc.subject
INCOME GROUP
dc.subject
INFORMAL ECONOMY
dc.subject
INFORMAL FINANCE
dc.subject
INFORMAL FINANCING
dc.subject
INFORMATION DISSEMINATION
dc.subject
INFORMATION SYSTEMS
dc.subject
INFORMATIONAL ASYMMETRIES
dc.subject
INSURANCE
dc.subject
INSURANCE AGENCIES
dc.subject
INTEREST RATES
dc.subject
INTERNAL FUNDS
dc.subject
INTERNATIONAL FINANCE
dc.subject
INVENTORY
dc.subject
JOB CREATION
dc.subject
LACK OF ACCESS
dc.subject
LACK OF COLLATERAL
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LACK OF CREDIT
dc.subject
LACK OF INFORMATION
dc.subject
LARGE ENTERPRISES
dc.subject
LAWS
dc.subject
LEASING
dc.subject
LENDERS
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LIMITED ACCESS
dc.subject
LIMITED ACCESS TO FINANCE
dc.subject
LINES OF CREDIT
dc.subject
LOAN
dc.subject
LOAN GUARANTEES
dc.subject
LOANS FOR WOMEN
dc.subject
LOANS FOR WOMEN ENTREPRENEURS
dc.subject
LOANS TO WOMEN
dc.subject
MANAGEMENT INFORMATION SYSTEMS
dc.subject
MANUFACTURERS
dc.subject
MEDIUM ENTERPRISE
dc.subject
MEDIUM ENTERPRISES
dc.subject
MICRO ENTERPRISES
dc.subject
MICRO-ENTERPRISES
dc.subject
MICROENTERPRISES
dc.subject
MICROFINANCE
dc.subject
MICROFINANCE INSTITUTIONS
dc.subject
MONETARY FUND
dc.subject
MOVABLE COLLATERAL
dc.subject
MULTINATIONAL
dc.subject
MULTINATIONAL COMPANIES
dc.subject
MULTINATIONALS
dc.subject
NEEDS OF WOMEN
dc.subject
NEEDS OF WOMEN ENTREPRENEURS
dc.subject
NET LOSS
dc.subject
NEW BUSINESSES
dc.subject
NEW MARKET
dc.subject
NEW MARKETS
dc.subject
OUTREACH
dc.subject
OVERDRAFT
dc.subject
OVERDRAFTS
dc.subject
PARTIAL CREDIT
dc.subject
PARTIAL GUARANTEE
dc.subject
PEER REVIEW
dc.subject
PENETRATION RATES
dc.subject
POINT OF SALE
dc.subject
PRIVATE COMMERCIAL BANKS
dc.subject
PRIVATE COMPANIES
dc.subject
PRIVATE CREDIT
dc.subject
PRODUCTIVITY
dc.subject
PROFITABILITY
dc.subject
PROPERTY LAW
dc.subject
PUBLIC FUND
dc.subject
PUBLIC POLICY
dc.subject
REAL ESTATE
dc.subject
REAL SECTOR
dc.subject
RECEIPTS
dc.subject
REGISTRATION PROCESS
dc.subject
REGULATORY BURDEN
dc.subject
REGULATORY REFORM
dc.subject
REGULATORY REFORMS
dc.subject
RETURN ON INVESTMENT
dc.subject
RISK MANAGEMENT
dc.subject
SAVINGS
dc.subject
SAVINGS ACCOUNTS
dc.subject
SECURITIES
dc.subject
SHOPS
dc.subject
SIZE OF FIRM
dc.subject
SMALL BUSINESS
dc.subject
SMALL BUSINESS BANKING
dc.subject
SMALL ENTERPRISES
dc.subject
SMALL FIRMS
dc.subject
SMART CARDS
dc.subject
SME
dc.subject
SME FINANCE
dc.subject
SME FINANCING
dc.subject
SME LENDING
dc.subject
SME SECTOR
dc.subject
SOCIAL SECURITY
dc.subject
STATE OWNED BANKS
dc.subject
STORE
dc.subject
SUBSIDIARY
dc.subject
SUPPLIERS
dc.subject
SUPPLY CHAIN
dc.subject
SUPPLY CHAINS
dc.subject
TAX LIABILITY
dc.subject
TERMS OF LOANS
dc.subject
TIME DEPOSITS
dc.subject
TRANSACTION COSTS
dc.subject
TRANSPORTATION SERVICES
dc.subject
UNEMPLOYMENT
dc.subject
WOMAN
dc.subject
WOMEN ENTREPRENEURS
dc.subject
WORKING CAPITAL
dc.title
Closing the Credit Gap for Formal and Informal Micro, Small, and Medium Enterprises
en
dc.type
Working Paper
en
okr.date.disclosure
2015-03-17
okr.doctype
Publications & Research
okr.doctype
Publications & Research :: Working Paper
okr.docurl
http://documents.worldbank.org/curated/en/2013/01/24162672/closing-credit-gap-formal-informal-micro-small-medium-enterprises
okr.globalpractice
Finance and Markets
okr.googlescholar.linkpresent
yes
okr.identifier.externaldocumentum
000477144_20150317085503
okr.identifier.internaldocumentum
24162672
okr.identifier.report
94911
okr.language.supported
en
okr.pdfurl
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/03/17/000477144_20150317085503/Rendered/PDF/949110WP0Box380p0Report0FinalLatest.pdf
en
okr.topic
Finance and Financial Sector Development :: Microfinance
okr.topic
Finance and Financial Sector Development :: Access to Finance
okr.topic
Finance and Financial Sector Development :: Debt Markets
okr.topic
Infrastructure Economics and Finance :: Private Participation in Infrastructure
okr.topic
Banks and Banking Reform
okr.unit
Finance & Markets - GP - IFC (GFMDR)

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