The Black Sea Trade and Development Bank will support the financing of SMEs in Armenia through a US $15 million loan to Ardshinbank.
The loan will benefit 100 SMEs and impact 3,600 jobs in Armenia, according to the article. SMEs in Armenia are a key driver and contributor to the country’s GDP, generating up to 40 percent of GDP.
The Royal Bank of Scotland laid away £2 billion to support SMEs with trade finance, term finance and increased liquidity as they handle Brexit.
According to the article SMEs rely on EU labour markets and exposure to foreign exchange movements.
During this time UK banks have anticipated concerns related to Brexit’s effect on supply chains and financial risks for SMEs and are creating preparations.
Efforts towards improving economic growth through SMEs are moving towards the Middle East and North African (MENA) territories, according to the article.
Due to the failing oil reserves and revenues, MENA governments have changed their focus towards SMEs for economic growth, through long term programs and plans.
According to the article, the SME industry in the MENA area is estimated at $1 trillion and has a vital role in promoting competitiveness, productivity and providing employment opportunities.
The European Bank for Reconstruction and Development (EBRD) and European Union (EU) launched the Advice for Small Businesses (ASB) Programme to support SMEs in Lebanon. The programme will help foster private sector growth, job creation, innovation, competitiveness, and increase SMEs’ access to finance.
According to the article, SMEs in Lebanon comprise over 90 percent of the private sector and support the economy in a substantial way. EBRD and EU’s programme will connect SMEs with local and international consultants and offer a variety of business advice.
Despite providing immense financial support for the economy, SMEs still face a multitude of challenges and lack support. According to the article, 72 percent of all startup funding went into only three companies in the region (Africa) in the span of two recent years.
Supply and demand are the causes inhibiting SMEs’ access to support. On the supply side, investors, banks and financial institutions are leery in providing capital before the post-revenue stage. On the demand side, entrepreneurs are not creating bankable or investable business models.
The largest untapped market in the world is women, according to Women’s World Banking. Financial institutions are failing to ensure their offerings work for women, however three elements with a gender-inclusive design can help counter this issue:
Euromoney says SMEs account for nine out of every 10 businesses in Mexico, however only a third have access to finance.
“Despite numerous financial institutions operating in the market, financial services penetration remains low,” said Norbert Schneider, principal investment officer for Mexico at the IFC.
SMEs in the country are lacking credit history, accounting, information or assets needed to receive a bank loan, according to the article.
Trust is also an issue for SMEs, coupled with fear of risk and growth.
The UN Secretary General’s High-level Meeting on Financing the 2030 Agenda for Sustainable Development discussed focus of investments, measuring data for SDGs and vulnerable countries and sectors.
According to the article, the meeting focused on:
Myanma Economic Bank (MEB) will provide funds to SMEs in the the manufacturing, production and trading, import substitution, recycling and energy saving and services sectors.
MEB has a two-step loan with an interest rate of nine percent, a part of their SME loan program.
Borrowers able to utilize property as collateral will be able to access K300 million. Variations of loan terms include:
Approved bank loans to SMEs has decreased by 15 percent over the last 10 years, and roughly 60 percent of all ventures in need of external financing have reported difficulties in accessing financing for their investments, according to an article by the Harvard Business Review.
Digitization is proving to have a negative effect on entrepreneurs, particularly women, with its elimination of relationship-based lending.
