Stein, PeerArdic, Oya PinarHommes, Martin2015-04-132015-04-132013-08https://hdl.handle.net/10986/21728Job 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-USCC BY-NC-ND 3.0 IGOACCESS TO BANK ACCOUNTSACCESS TO CREDITACCESS TO EDUCATIONACCESS TO FINANCEACCESS TO FINANCIAL SERVICESACCESS TO INFORMATIONACCESS TO MARKETACCESS TO MARKETSACCESS TO RESOURCESACCESSIBILITYACCOUNTINGACCOUNTS RECEIVABLEADVISORY SERVICESAFFILIATESAGRICULTURAL ACTIVITIESAVAILABILITY OF CREDITBANK ACCOUNTBANK ACCOUNTSBANK FINANCINGBANK LENDINGBANKING MODELSBANKING SECTORBANKING SERVICESBANKSBORROWERBRANCHBRANCH NETWORKBRIBEBRIBESBUSINESS ASSOCIATIONBUSINESS ASSOCIATIONSBUSINESS ENABLINGBUSINESS ENABLING ENVIRONMENTBUSINESS OPPORTUNITYBUSINESS OWNERSBUSINESS PLANCAPACITY BUILDINGCAPITAL LOANSCAPITAL STOCKCASH FLOWCASH FLOWSCHECKINGCHECKING ACCOUNTCHECKING ACCOUNTSCOLLATERALCOLLATERAL REQUIREMENTSCOMMERCIAL BANKINGCOMMERCIAL BANKSCOMMERCIAL LOANSCOMPANYCOMPETITORSCONSULTING SERVICESCONTRACT ENFORCEMENTCORPORATIONCORPORATIONSCORRUPTIONCOUNTRY COMPARISONSCREDIT BUREAUSCREDIT CONSTRAINTCREDIT DECISIONSCREDIT GAPCREDIT GUARANTEECREDIT HISTORYCREDIT MARKETCREDIT RISKCREDITWORTHINESSCULTURAL BARRIERSCUSTOMER BASEDEMAND FOR CREDITDEPOSITDEPOSIT ACCOUNTDEPOSIT PRODUCTSDEPOSITSDEVELOPING COUNTRIESDEVELOPMENT FINANCEDEVELOPMENT FINANCE INSTITUTIONSE-LEARNINGECONOMIC ACTIVITYECONOMIC COOPERATIONECONOMIC DEVELOPMENTECONOMIC GROWTHEMERGING MARKETSEMPLOYEREMPLOYERSEMPLOYMENT GROWTHEMPLOYMENT OPPORTUNITIESENTERPRISE FINANCEENTREPRENEURENTREPRENEURIAL ACTIVITYENTREPRENEURSHIPEXCLUSIONEXTERNAL FINANCEFACILITATIONFINANCE INITIATIVEFINANCIAL CRISISFINANCIAL INFRASTRUCTUREFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIARIESFINANCIAL LITERACYFINANCIAL MARKETSFINANCIAL NEEDSFINANCIAL SERVICESFINANCIAL SERVICES FOR WOMENFINANCIAL SUSTAINABILITYFINANCING SHORTFALLFIRMSFORMAL ECONOMYFORMAL FINANCIAL SECTORFORMAL FINANCIAL SERVICESGENDERGENDER EQUALITYGREATER ACCESSGUARANTEE SCHEMESHUMAN CAPITALHUSBANDIDINCOME GROUPINFORMAL ECONOMYINFORMAL FINANCEINFORMAL FINANCINGINFORMATION DISSEMINATIONINFORMATION SYSTEMSINFORMATIONAL ASYMMETRIESINSURANCEINSURANCE AGENCIESINTEREST RATESINTERNAL FUNDSINTERNATIONAL FINANCEINVENTORYJOB CREATIONLACK OF ACCESSLACK OF COLLATERALLACK OF CREDITLACK OF INFORMATIONLARGE ENTERPRISESLAWSLEASINGLENDERSLIMITED ACCESSLIMITED ACCESS TO FINANCELINES OF CREDITLOANLOAN GUARANTEESLOANS FOR WOMENLOANS FOR WOMEN ENTREPRENEURSLOANS TO WOMENMANAGEMENT INFORMATION SYSTEMSMANUFACTURERSMEDIUM ENTERPRISEMEDIUM ENTERPRISESMICRO ENTERPRISESMICRO-ENTERPRISESMICROENTERPRISESMICROFINANCEMICROFINANCE INSTITUTIONSMONETARY FUNDMOVABLE COLLATERALMULTINATIONALMULTINATIONAL COMPANIESMULTINATIONALSNEEDS OF WOMENNEEDS OF WOMEN ENTREPRENEURSNET LOSSNEW BUSINESSESNEW MARKETNEW MARKETSOUTREACHOVERDRAFTOVERDRAFTSPARTIAL CREDITPARTIAL GUARANTEEPEER REVIEWPENETRATION RATESPOINT OF SALEPRIVATE COMMERCIAL BANKSPRIVATE COMPANIESPRIVATE CREDITPRODUCTIVITYPROFITABILITYPROPERTY LAWPUBLIC FUNDPUBLIC POLICYREAL ESTATEREAL SECTORRECEIPTSREGISTRATION PROCESSREGULATORY BURDENREGULATORY REFORMREGULATORY REFORMSRETURN ON INVESTMENTRISK MANAGEMENTSAVINGSSAVINGS ACCOUNTSSECURITIESSHOPSSIZE OF FIRMSMALL BUSINESSSMALL BUSINESS BANKINGSMALL ENTERPRISESSMALL FIRMSSMART CARDSSMESME FINANCESME FINANCINGSME LENDINGSME SECTORSOCIAL SECURITYSTATE OWNED BANKSSTORESUBSIDIARYSUPPLIERSSUPPLY CHAINSUPPLY CHAINSTAX LIABILITYTERMS OF LOANSTIME DEPOSITSTRANSACTION COSTSTRANSPORTATION SERVICESUNEMPLOYMENTWOMANWOMEN ENTREPRENEURSWORKING CAPITALWorking PaperInternational Finance Corporation10.1596/21728