What mechanisms for access to finance for the development of SMEs?
Small and medium-sized enterprises are the backbone of the African economy, accounting for over 90% of businesses and employing nearly two-thirds of workers. As a result, SMEs create the majority of new jobs on the continent and are set to play a key role in accommodating the 900 million Africans who will join the workforce by 2050.
SMEs are emerging as a core layer of the African economy. However, they generate a relatively small share of GDP, which is mainly due to difficulties in accessing funds. Self-financing and informal savings and credit associations remain their main sources of finance, but they are unreliable, unpredictable and limited, while formal institutions have difficulty granting loans to SMEs.
In the wake of Covid-19, which has severely affected the activities of SMEs, it is crucial to rethink the mechanisms for accessing business funding for these small and medium-sized companies which represent an important lever for the continent’s take-off.