Financing SMEs and Entrepreneurs 2015 - An OECD Scoreboard
More than half a decade after the onset of the global economic and financial crisis, start-ups and small firms continue to face important challenges in obtaining finance, a key ingredient to their development. As governments around the world strive to achieve growth that is sustainable and inclusive, there is a pressing need to find solutions that enable small and medium-sized enterprises (SMEs) and entrepreneurs to fulfil their role in boosting investment, creating jobs and achieving social cohesion.
With Financing SMEs and Entrepreneurs 2015, the OECD provides a solid foundation for evidence-based policies to foster SME access to finance. This fourth edition of the Scoreboard makes important progress in advancing this agenda. It provides information on debt, equity, asset-based finance and framework conditions for SME and entrepreneurship finance, complemented with a review of recent policy measures to support SME finance in 34 countries.
The data show that access to finance remains problematic in many countries. Financing conditions generally improved, especially with respect to the average interest rates charged to SMEs, although they remain tight in most countries. However, despite this positive development, the total outstanding stock of SME loans shrank in a number of countries in 2013, and has still not recovered to 2007 levels in countries as diverse as Greece, Italy, Ireland, Portugal, the United Kingdom and the United States. The OECD is continuing to support governments as they seek to reverse this trend.
In 2013 and 2014, governments were particularly active in their efforts to foster SME access to finance. The provision of credit guarantees continues to be the most widely used policy instrument in this regard. In addition, many new programmes were introduced, with a noticeable shift of policy attention towards high-potential innovative firms. Indeed, many governments launched new initiatives to stimulate venture capital investments and foster innovation in SMEs through tax incentives; they have also modified existing direct lending or credit guarantee schemes to target innovative SMEs.
The thematic chapter of this edition of Financing SMEs and Entrepreneurs 2015 focuses on SME non-performing loans (NPLs). It highlights the detrimental effects that high and increasing NPLs have on SME lending, GDP growth and job creation. In particular, NPLs pose important risks to economic recovery in countries that experienced severe economic difficulties in recent years, such as Greece, Hungary, Italy, Portugal, Serbia and Spain. The chapter underlines the difficulties of meaningful analysis of NPLs due to multiple definitions and widely different practices in the classification of loans. It emphasises the importance of making progress in harmonisation in order to better understand this phenomenon.
This edition of the Scoreboard also makes significant progress in data harmonisation and the expansion of coverage to alternative finance instruments for SMEs. The OECD will continue to assist governments in understanding SME finance trends, and to underpin the development of appropriate policy responses. Our common goal is a financial system that serves the needs of all enterprises, and enables them to invest, grow and contribute to sustainable and inclusive growth.