Small business is big business – everyone agrees on that. Small and medium enterprises (SMEs) form the backbone of most economies. But while banks have always talked of the importance of this segment, providing comprehensive funding has proved elusive.
The topic of SME finance is very much at the forefront of policymakers’ thoughts in both developed and emerging markets. Saudi Arabia’s central bank governor talks to The Banker about efforts to improve credit information to make small businesses more bankable. And SMEs also form a central focus of the EU’s capital markets union initiative, which is looking to promote securitisations of bank loans to SMEs. This underscores the assumption that bank distribution networks will remain at the heart of SME financing.
