The G20 Global Partnership for Financial Inclusion (GPFI) has unveiled a new Action Plan aimed at addressing the persistent financing challenges faced by Micro, Small, and Medium Enterprises (MSMEs) worldwide. The initiative calls for concerted efforts from both G20 member nations and non-G20 countries to close the significant financing gap that continues to hinder MSME growth and development.
MSMEs play a pivotal role in driving global economic activity and are responsible for a substantial share of employment. Despite their importance, these businesses consistently face barriers to accessing the necessary capital. In 2019, the financing gap for MSMEs in emerging market and developing economies (EMDEs) was estimated at a staggering $5.7 trillion. Notably, women-owned MSMEs accounted for 34% of this deficit.
The GPFI’s Action Plan emphasizes that closing this financing gap is crucial not only for fostering MSME growth and enhancing economic resilience but also for advancing the broader sustainable development goals (SDGs). By ensuring that MSMEs have better access to financial resources, countries can boost national economies and improve their capacity to meet the SDGs.
The plan identifies several key enablers of MSME financing, with a particular focus on financial technologies (fintech). Governments are urged to create a supportive regulatory environment that addresses persistent barriers and friction points. The action plan also includes recommendations for improving the impact of financial interventions and enhancing the mobilization of private sector funding to support MSMEs.
By addressing these critical challenges, the G20 aims to empower MSMEs, catalyze economic growth, and foster sustainable development on a global scale.
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