Small- and Medium-Sized Enterprise Finance in Africa

This paper surveys the state of SME finance in sub- Saharan Africa. The authors use Enterprise Survey data from the World Bank to explore cross-country and cross-firm variation in the use of financial services. They document lower use of financial services by firms inside than outside Africa and by smaller and younger firms. The authors use regression analysis to relate firms’ access to finance to an array of firm and country characteristics, and gauge whether these relationships are different inside and outside Africa. They also discuss several persistent and new challenges for SME finance in Africa.