The members of European Development Finance Institutions (EDFI) have jointly commissioned an evaluation of the effectiveness of EDFI members’ support for SME development through financial institutions in Africa.
Providing support to the SME sector is viewed by development finance institutions as a powerful means for achieving economic and social development objectives. As direct forms of SME support have been found relatively costly and prone to failure, indirect approaches have been preferred. One of them consists of augmenting the provision of financial services accessible to SME, including credit, by strengthening local financial intermediaries (“supply-side approach”). Using this approach, European Development Finance Institutions (EDFIs) are important financiers of local SME lenders, acting in individual, joint or parallel transactions.
To date, however, little evaluative evidence is available on whether and how such projects contribute to increased supply of credit to SMEs.
This present study, carried out on behalf of EDFI, explores three key questions:
Is EDFI support effective in terms of increased access for SMEs to financial services?
Which factors are determinant with regard to the effectiveness of EDFI support?
What impact has EDFI support had on supported FIs’ SME clients?
