geo/europe-and-central-asia
Alternative finance is an innovative way in which individuals and business can secure capital to move forward in today’s volatile European markets. With the economy still recovering from its previous financial crisis, the downturn in the Chinese economy and the unknown fate of certain EU member states such as Greece, institutions have to be looking at innovative ways to secure future financing opportunities.
This scoreboard establishes a comprehensive international framework for monitoring SMEs’ and entrepreneurs’ access to finance over time. Comprising 18 countries it presents data for a number of debt, equity and financing framework condition indicators. It provides governments with a tool to understand SMEs’ financing needs.
Of 3,000 SMEs surveyed in research commissioned by Leaseurope, some 43% used leasing in 2013, up from 40% in 2010 and this figure was estimated to have risen further to 51% in 2014 – a 19% increase over the previous year.
Of those SMEs who did not lease in 2013, more than a quarter had done so in the past, with 17% of these stating they would use leasing in 2014.
Credit guarantee schemes have rarely been the subject of rigorous research; consequently, policy makers across the EU lack a reliable impact assessment of these programs on final SME beneficiaries. This analysis estimates the economic impact at final beneficiary level of the Multi-Annual Program for enterprises and entrepreneurship EU SME Guarantee Facility in Central, Eastern and South-Eastern European Countries in the period 2005-2012.
The Annual DFI/IFI Working Group Meeting serves as a forum for exchanges of knowledge, experiences, and lessons learned as well as for coordination on SME finance among the development finance institutions (DFI) and international finance institutions (IFI).
The European Union and many of its individual member states are working on ways to improve SMEs’ access to working capital on the understanding that small businesses are the backbone to economic strength and employment. These efforts are largely fueled by the impacts of the economic crisis, which forced banks to adopt more stringent lending rules. SMEs saw higher interest rates, if they were approved for a bank loan at all.Today, alternative funding is viewed by many as the remedy to SMEs’ weakened access to working capital, though some research shows that banks are relaxing their lending behaviors.New proposals by the Basel Committee on Banking Supervision, however, could introduce a new wave of SMEs unable to access working capital from a traditional financial institution. Experts agree that, if approved, the Basel regulations would have widespread effects on the banking sector and the SME community throughout the jurisdictions that adopt them. Just what those effects are, however, are unclear, and are likely to vary from country to country. The Basel Committee’s proposals are likely to harm SMEs that depend on banks to access capital, but they may also boost the alternative lending markets in nations that embrace the industry.
This fourth edition monitors SMEs’ and entrepreneurs’ access to finance in 34 countries over the period 2007-13, across an expanded array of indicators, including debt, equity, asset-based finance and framework conditions. These are complemented by an overview of recent developments in public and private initiatives to support SME finance, and a special focus on non-performing loans. The report aims to provide a comprehensive framework for policy makers and other stakeholders to evaluate the financing needs of SMEs.
Alternative funding options will remain an integral part of small and medium-sized enterprises’ (SMEs’) financial toolset as credit for them remains constrained, according to two OECD reports.
Micro SMEs still cut off from bank finance; new way to lend against cash flow.
AMP Credit Technologies, a specialist provider to banks in Asia of credit scoring and loan portfolio management technology that enables lending to micro small and medium-sized enterprises (SMEs), launched in the UK last week.
Given the importance of SMEs as the backbone of the EU economy, their access to finance is of particular relevance. Unlike other companies in the EU, SMEs are more concerned with access to finance, largely due to their reliance on banks. In 2013 and 2014, many SMEs continued to experience financing difficulties, especially those from the most vulnerable EU Member States, which faced higher interest rates and stricter lending conditions. In this article the authors analyse and summarise the current state of SME financing in Europe.
