Financing Small and Medium Enterprises (SMEs)
Financing Small and Medium Enterprises (SMEs)
Improving SMEs’ access to finance and finding innovative solutions to unlock sources of capital.
Small and Medium Enterprises (SMEs) play a major role in most economies, particularly in developing countries. SMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development. They represent about 90% of businesses and more than 50% of employment worldwide. Formal SMEs contribute up to 40% of national income (GDP) in emerging economies. These numbers are significantly higher when informal SMEs are included. According to our estimates, 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world. In emerging markets, most formal jobs are generated by SMEs, which create 7 out of 10 jobs. However, access to finance is a key constraint to SME growth, it is the second most cited obstacle facing SMEs to grow their businesses in emerging markets and developing countries.
What We Do
One of the major visions of HAVELET FINANCE LIMITED is to improve SMEs’ access to finance and find innovative solutions to unlock sources of capital. Our approach is holistic, combining advisory and lending services to clients to increase the contribution that SMEs can make to the economy including underserved segments such as women owned SMEs. Advisory and Policy Support for SME finance mainly includes diagnostics, implementation support, global advocacy and knowledge sharing of good practice. For example HAVELET FINANCE LIMITED provides the following;
- Financial sector assessments to determine areas of improvement in regulatory and policy aspects enabling increased responsible SME access to finance
- Implementation support of initiatives such as development of enabling environment, design and set up of credit guarantee schemes
- Improving credit infrastructure (credit reporting systems, secured transactions and collateral registries, and insolvency regimes) which can lead to greater SME access to finance.
- Introducing innovation in SME finance such as e-lending platforms, use of alternative data for credit decisions, e-invoicing, e-factoring and supply chain financing.
- Policy work, analytical work, and other Advisory Services can also be provided in support of SME finance activities.
- Knowledge management tools and flagship publications on good practice, successful models and policy frameworks
Results of Our Work
Early-Stage SME Finance
In Lebanon, the Innovative Small and Medium Enterprises (iSME) project is a $30 million investment lending operation providing equity co-investments in innovative young firms in addition to a grant funding window for seed stage firms. As of August 2019, iSME’s co-investment fund has invested $10.23 million across 22 investments and has been able to leverage $25.47 million in co-financing, demonstrating its ability to crowd in private sector financing and expand the market for early stage equity finance in Lebanon. To date, 60 out of 174 grantees had leveraged the iSME funding to raise a total of $13.1 million from various funding sources, a leverage ratio of 5.3 times. Overall, stakeholders’ consultations suggest that the iSME project could play an even larger role in the future financing of the Venture Capital (VC) sector by supporting existing VCs and emerging players, including increasing attention on a fund of funds approach, which could also cover growth funds (later stage and private equity).
Who We Work With
Leveraging our expert knowledge, we work globally with public stakeholders and private sector intermediaries in partnership with other multilateral and bilateral development organizations to support SME Finance development in emerging markets and developing countries.
Havelet Finance Limited is a backbone for all related SME’s financing worldwide. To get started, kindly contact the below;
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