The International Finance Corporation (IFC) and Small and Micro Enterprises (SME) Finance Forum propose a solution that will solve Sub-Saharan Africa’s small and medium enterprises (SMEs) $331 billion gap.
The SMEs have benefited enormously from the revolution in digital finance in the region, and now require more innovation and targeted approaches to meet the funding gap.
These issues are at the forefront of discussion in Nairobi at the SME Finance Forum, an initiative managed by the IFC, a member of the World Bank Group.
Microentrepreneurs and small and medium enterprises are leading employment in Sub-Saharan Africa and contribute significantly to economic growth. But, their development is constrained by limited access to finance and markets. In Sub-Saharan Africa, there are at least 44 million formal MSMEs, 51% of which require more finance than they can access to grow their businesses.
Through the first Africa SME Finance Forum, IFC, financial institutions and entrepreneurs are seeking to find solutions to close the gap. The conference on May 15-16 will explore local and global best practice SME banking solutions to harness digital technology, e-commerce and blockchain, to promote youth entrepreneurship and new SME banking models.
SMEs are critical to meeting the needs of Africa’s rapidly growing population. Africa’s working age population will increase by 1.7 million people a month until 2030, and the urban population is expected to double over the next 25 years.
“We are seeing significant improvements in access to finance in Africa, creating opportunities for small and medium enterprises that create jobs and reduce poverty. We should celebrate the gains while recognizing we have much more to do. Digital finance is the future so we must expand and tailor products and services to meet the growing needs of a dynamic continent,” said Karin Finkelston, Vice President of Partnerships, Communication, and Outreach at IFC.
“We realize that the Kenyan economy runs on small and medium sized enterprises, and we need to ensure that they have adequate access to the financing that they need to be successful,” said Dr. Patrick Njoroge, Governor of the Central Bank of Kenya, who opened the SME Finance Forum event in Kenya.
“We are at a time of immense change in finance – change that opens up opportunities to serve SMEs. The SME Finance Forum hopes to accelerate this change by helping the finance industry learn from each other, link to new market opportunities, and lead the industry’s voice in high level policy dialogue,” said Matthew Gamser, CEO of the SME Finance Forum.