OECD SME and Entrepreneurship Papers

The series provides comparative evidence and analysis on SME and entrepreneurship performance and trends and on a broad range of policy areas, including SME financing, innovation, productivity, skills, internationalisation, and others.


Fostering Markets for SME Finance

Matching Business and Investor Needs

The 2008-09 global financial crisis had a profound impact on the availability of bank credit for SMEs. Although a decline in the demand for bank credit played an important role, banks have also become more reluctant to lend, including as a consequence of new capital requirements. Moreover, a longstanding financing gap exists for SMEs with a high risk/return profile, such as start-ups, fast-growing and highly innovative SMEs. While bank financing will continue to be crucial for SMEs, broadening the financing options would enable SMEs to better seize growth opportunities and reduce their vulnerability to changes in credit market conditions and economic downturns.

The present study analyses key impediments to SMEs’ uptake of alternative financial instruments, both on the demand- and supply-side. The study discusses the role of policy in fostering SME finance markets and reviews recent trends in policy measures to support the development of alternative financial instruments for SMEs.


Keywords: Financial Crisis, Non-bank Finance, Financial Skills, SME Finance, Equity, Public Policy
JEL: L26: Industrial Organization / Firm Objectives, Organization, and Behavior / Entrepreneurship; G28: Financial Economics / Financial Institutions and Services / Financial Institutions and Services: Government Policy and Regulation; G23: Financial Economics / Financial Institutions and Services / Non-bank Financial Institutions; Financial Instruments; Institutional Investors; G32: Financial Economics / Corporate Finance and Governance / Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
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