MSMEs financing in Africa
MSMEs financing in Africa8 April, 2021 •
A framework for enabling access to finance for MSMEs in Africa
Micro, small and medium enterprises (MSMEs) have been cited as one of the strongest drivers of economic development, job creation and innovation. Yet one of the biggest constraints stifling MSMEs growth, particularly in Africa, is the difficulty associated with accessing finance (Bruhn et al., 2017). As evidenced by the 243 MSME policies reviewed in this study, African governments have clearly acknowledged this challenge and are implementing policies aimed at supporting MSMEs’ access to finance and, by extension, growth. There is also a clear recognition that MSMEs development is not only dependent on access to finance, but also the development of business and technical skills, providing access to markets, physical infrastructure, and provision of holistic legal and regulatory frameworks (AFI, 2020).
This policy catalogue provides an overview of existing African policies that are aimed at improving MSMEs’ access to finance. In light of the effects of the COVID-19 pandemic on MSMEs, fit-for-purpose policies to enhance financing options are crucial for governments to consider. The main aim of the report is to highlight the current landscape of MSMEs financing policies in Africa. The report provides recommendations and best-practice examples and looks at the current practices regarding the design and implementation of MSMEs financing policies in Africa.
Based on the findings from the landscaping exercise of 243 policies across 54 countries, a simple but effective framework has emerged to aid African policymakers in designing effective MSMEs support mechanisms that enable access to finance for MSMEs.
Download the comprehensive report on MSMEs financing policies that can provide policymakers with a practical reference on how to improve MSMEs access to finance. The report provides recommendations and best-practice examples and looks at the current practices regarding the design and implementation of MSMEs financing policies in Africa.
This special report was supported by the African Financial Inclusion Policy Initiative (AfPI) and the SME Finance Working group (SMEFWG) and its members.