Financing SMEs and Entrepreneurs 2024
An OECD Scoreboard
Since 2020, a series of shocks to the global economy has had significant impacts on small and medium-sized enterprises (SMEs) and entrepreneurs and their access to finance. Most recently, significant inflationary pressures have led to tighter lending conditions, limiting the flow of finance to SMEs and acting as a barrier to investment. Financing SMEs and Entrepreneurs 2024: An OECD Scoreboard monitors SME and entrepreneurship financing trends, conditions and policy developments in close to 50 countries. It documents a strong increase in the cost of SME financing in 2022, alongside a significant decline in SME lending. Equity finance also fell sharply in 2022, after a year of historically high growth in 2021. Women-led and minority-owned businesses, which typically find it more difficult to access venture capital financing, were affected disproportionately. Against this backdrop, the Scoreboard highlights the recent measures governments have taken to support SME access to finance, including finance for the green transition. A continued focus on diversifying financial sources and instruments will be important to meet the different needs of all types of SMEs and entrepreneurs, and enable them to act as an engine of resilient, sustainable and inclusive growth.
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United Kingdom
The developments in SME finance markets in the United Kingdom in 2022 reflected the difficulties faced by the global economy. While the impact of the COVID-19 pandemic waned, major challenges emerged that affected the use of finance by SMEs. In particular, the large-scale aggression of Russia against Ukraine contributed to a sharp rise in input costs. This subsequently led to a large rise in the inflation rate which, in turn, resulted in the Bank of England (BoE) raising the Bank Rate. The war also increased uncertainty about the outlook for the UK and other major economies.
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