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SME Policy Index: ASEAN 2018

Boosting Competitiveness and Inclusive Growth

image of SME Policy Index: ASEAN 2018

The SME Policy Index is a benchmarking tool for emerging economies to monitor and evaluate progress in policies that support small and medium-sized enterprises. The ASEAN SME Policy Index 2018 is a joint effort between the Economic Research Institute for ASEAN and East-Asia (ERIA), the Organisation for Economic Co-operation and Development (OECD) and the ASEAN Coordinating Committee on Micro, Small and Medium Enterprises (ACCMSME). The report is the outcome of work conducted by the ten ASEAN Member States (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam).

Divided into eight policy dimensions, it builds on the previous edition of the ASEAN SME Policy Index 2014. The current edition presents an updated methodology which makes this document a powerful tool to assess the strengths and weaknesses that exist in policy design, implementation, and monitoring and evaluation for SMEs, and allows for a benchmarking of the level to which the ASEAN Strategic Action Plan for SME Development (SAP SMED) 2016-2025 has been implemented. Its objective is to enhance the capacity of policy makers to identify policy areas for future reform, as well as implement reforms in accordance with international good practices.

The report provides a regional perspective on recent developments in SME-related policies in Southeast Asia as well as in individual ASEAN Member States.  Based on this analysis the report provides a menu of concrete policy options for the region and for the individual countries.

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Access to finance

An extensive literature supports the principle that barriers to accessing formal external finance prevent all firms from reaching their optimal size, and that greater access to a broad range of financial products can also aid innovation (Ayyagari et al (2017[1]; Aghion, Fally and Scarpetta, 2007[2]). Well-functioning financial markets that allow firms to access alternative sources of financing, outside informal finance and retained earnings allow competitive firms to invest further in tangible assets, to select more efficient organisational forms (Demirguc-Kunt, Love and Maksimovic, 2006[3]), and to ride out periods of stunted or volatile cash flow (Siedschlag et al., 2014[4]).

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