SMALL AND MEDIUM ENTERPRISE FINANCE

Challenges

Small and medium enterprises (SMEs) are widely recognized as the backbone of economic development. Though SMEs may be small individually, the SME sector as a whole has gradually emerged as a dominant economic player and engine for growth in numerous countries. SMEs create and sustain more than two thirds of worldwide employment. The sector is well acknowledged for stabilizing economic conditions, supporting the development of communities and driving innovation.
 
Despite their recognition as a priority for most developing economies, SMEs are less likely to obtain bank loans than large corporations. It is therefore necessary to widen their access to conventional financial services and develop alternative sources of funding.


GFA concept and services

GFA’s Financial Systems Development Department supports banks as well as specialized financial institutions worldwide. The range of instruments extends from standard debt finance to hybrid financing techniques and equity investment. Our goal is to develop and implement effective and innovative financial services based on a value proposition strategy tailored specifically towards SME customers.
 
We take steps to raise financial literacy among SME clients, enhance the capacities of business and trade actors along supply chains, and emphasize support towards women in business. The application of these principles is part of our systemic approach towards SME Finance which combines financial expertise with private sector support and capacity building.
 
Our services are based on a thorough understanding of both the supply side and the demand side of financial markets. Our innovative and field-proven solutions are derived from GFA’s relevant strategic business areas that cover private sector development, trade, agricultural & rural development as well as green energy.
 
GFA Financial Systems Development ultimately focuses on the development of a profitable SME portfolio with the partnering financial institutions. Our services encompass product development, improved marketing as well as process management. We support the introduction of straightforward lending or investment technologies, ensure efficient use of management information systems and address SME-specific risk management. We further assist in the integration of facilitators such as guarantee schemes, supportive value chain actors and public or private fund structures.
 
Since high-quality capacity building is a prerequisite for the sustainability of any of these measures, we base our capacity building on the combination of practical on-the-job coaching and classroom training which is derived from state-of-the-art interactive adult learning principles.