Improving Access to Finance for SMEs through Credit Infrastructure Reforms
This report focuses on practices aimed at improving SMEs access to finance in three areas—credit reporting, secured lending and insolvency. Each section uses data collected by the World Bank Group's Doing Business team to describe how various practices recommended by existing research have been implemented in economies across the world. The first section on credit reporting discusses four practices: (i) improving borrower identification when it comes to SMEs, (ii) identifying and including more sources that report information on SME borrowing, (iii) facilitating comprehensive delivery of financial information and (iv) developing credit reporting products customized for SMEs. The second section on secured lending considers the importance of collateral registries in SME lending. This section further looks at two alternative lending mechanisms that may be better suited for SMEs than traditional security interests—factoring and financial leasing. The third section on insolvency provides information on three practices that can be used as alternatives to formal insolvency proceedings: out-of-court settlements, pre-insolvency proceedings and specialized proceedings designed for SMEs.
This publication is the result of a DEC project started after the G20 Joint Action Plan on SME Financing was issued in Antalya under the Turkish Presidency.