downtoearth-subscribe

MPFD Working Paper on A Review of Access to Finance by Micro, Small and Medium Enterprises and Digital Financial Services in Selected Asia-Pacific Least Developed Countries

Micro, Small and Medium Enterprises (MSMEs) are key to the economies of various countries. Their numbers and contribution towards employment is well documented and there is acceptance amongst policy makers that these enterprises are critical for economic development. Increasingly, access to finance has been recognised as a major hurdle in their development or growth. Amongst, the countries reviewed in this paper - Bangladesh, Bhutan, Cambodia, Lao People’s Democratic Republic, and Nepal – Bhutan is the only target country where the supply of finance to MSMEs is favourable with nearly 68% of the demand being met. Cambodia has the highest finance gap followed closely by Lao Peoples Democratic Republic and Nepal. While examining the finance gap of micro enterprises and SMEs, the gap revealed in Bhutan, Cambodia, Lao People’s Democratic Republic and Nepal are not substantial. However, in Bangladesh the differences are much larger between micro enterprises and SMEs with only 14% of micro enterprise demand being met.