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SME Financing Gap

SME Financing Gap

The International Finance Corporation (IFC) estimates that 65 million businesses, or 40% of formal micro, small and medium enterprises (MSMEs) in developing countries, have an unmet financing need of $5.2 trillion every year. That is equivalent to 1.4 times the current level of the global MSME lending (source). While the microenterprise finance gap is estimated at $718.8 billion, the SME finance gap makes up a larger percentage with $4.5 trillion in unmet demand.

The combined gap is equivalent to 19% of the GDP of the IFC’s 128 surveyed countries. Microenterprises outnumber SME’s 7-to-1, yet SMEs account for a larger percentage of the finance gap due to larger transaction volumes. Despite the distribution of volume between microenterprises and SMEs, the percentage of constrained enterprises within each segment is nearly identical.

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At Impact Capital Partners, our mission is to connect institutional capital with the growing impact investment market to address the world’s most pressing challenges. By utilizing impact investments, institutional investors are able to generate positive, measurable social and environmental impact alongside a financial return. We are constantly finding new impact investment opportunities in both emerging and developed markets, targeting market-rate returns. Schedule a call with us HERE if you’re interested in learning more about our impact investing strategies.


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