G-20 Financing Competition for SMEs
With support from the Rockefeller Foundation, the G-20 and Ashoka’s Changemakers are seeking solutions for public-private partnerships that catalyze finance for small and medium enterprises (SMEs) worldwide on a sustainable and scalable basis.
t the Pittsburgh Summit, the G-20 created the Financial Inclusion Experts Group (FIEG) to expand access to financial services, including credit to the poor. In Pittsburgh, leaders also called for the launch of a global small and medium-sized enterprises (SME) Finance Challenge, a unique financial inclusion effort aimed at helping small- and medium-sized entrepreneurs grow their businesses.
The aim of the Challenge is to find the best models worldwide for public-private partnerships that catalyze finance for SMEs and to give the creators of those models a chance to solicit financing.
Proposals can take a variety of forms, including policy or regulatory changes, strengthening market infrastructure, capacity-building assistance for SMEs or those financing SMEs, or public-private risk-sharing initiatives.
The best 12-15 proposals will be selected as winners, including at least one from each of the world’s six regions (Africa, East Asia and the Pacific, Europe and Central Asia, Latin America and the Caribbean, Middle East and North Africa, and South Asia).
Proposals will be judged by a panel of five independent experts and three G-20 representatives.
Challenge winners will be invited to the G-20 Summit in Seoul in November 2010 to showcase their ideas and gain access to a pool of public finance mobilized by the G-20.
Private financial institutions, investors, companies, foundations and civil society organizations are all invited to submit proposals online.
SMEs play a major role in economic development and are often the single largest source of job creation, particularly in emerging economies. Lack of access to finance, however, is a major obstacle to these firms’ growth. Only an estimated 20 percent of small firms in low-income countries have access to credit. SMEs are often too small to attract commercial bank or investor interest, but are too large to benefit from microfinance products. To date, few scalable solutions to support this “missing middle” tier of businesses have been found.