Small and medium-sized enterprises (SMEs) are an essential part of any economy by contributing to wealth creation and poverty alleviation. In most countries, SMEs employ the largest share of the workforce and contribute significantly to the country’s GDP. As such, job and value creation in the SME arena is a vehicle for inclusive growth. SMEs also have the potential to bring about substantial environmental improvements and are an engine for technological progress and innovation. Usually, SMEs are financially sound and have a successful history as long-standing microenterprises.
Nevertheless, in many countries SMEs have limited access to financial products and services. Misguided perceptions of overly risky business models that serve unprofitable customers mean that SMEs are not served by many commercial banks. Success stories worldwide, however, illustrate that SME finance can be a profitable business and that the risks can be managed. Banks can profit by engaging with SMEs, diversifying their credit risk and customer structure, and thus expanding their business.
We help financial institutions to establish or improve SME finance as a sustainable business segment.
The provision of training courses across a large range of topics is another crucial part of our services. Classroom and digital workshops, as well as on-the-job training and coaching sessions are the most important training methods we use.
We also offer the following microfinance topics within our Development Finance Academies:
The Frankfurt School Development Finance e-Campus has become a very successful e-learning tool for professionals interested in SME Banking & Development.
Successful business development to enter the SME market requires the establishment of adequate organizational structures guided by strategic planning and policy. This encompasses all policies, process descriptions and workflows, as well as the development of business plans for the SME market. Timelines, as well as key performance indicators, define the growth path of SME finance for our partner financial institutions (FIs).
A successful SME offers financial and non-financial products, which reflect local market conditions and customer expectations. Hence, we support our clients with market research, design of marketing initiatives and customized product descriptions, and we coach their staff to introduce new services and products. Financial products include working capital, investment loans, deposit-related products, guarantees, and trade facilities. Non-financial products focus on value-chain optimization, leadership & networking.
IAS aims to ensure the stable growth of the SME business sector in our partner FIs. We start with support in recruitment and the development of relevant functions in the organization, through detailed training and capacity-building plans, incentive schemes, and training impact analysis.
IAS offers credit risk assessment, loan portfolio management, and reporting tools, which are integrated within the existing structures of our partner FIs. These tools facilitate daily lending operations and assist the management team in performance evaluation and results monitoring.
IAS aims to strengthen local business development advisory capacities, as well as to support directly entrepreneurs and enterprises to start and grow their business successfully. This ranges from bespoke and/or cohort-based training programmes to coaching and mentoring services.
EU - Germany - Ukraine: SME Support Program in Ukraine
MENA l EBRD l 2015-2021
Jordan MSME Framework – MSME Lending Capacity Building for Partner Banks
MENA l KfW l 2019-2022
Creation of a National Development Bank (Banque des Régions)
Sub-Saharan Africa l AfDB l 2014-2019
AfDB’s Africa SME Support Program – Technical Assistance to support SME focused Financial Institutions
Turkey, Caucasus and Central Asia l KfW l 2019-2020
Empowering the Private Sector in Turkey to Create Formal Employment for Syrian Refugees and the Turkish Host Community
Turkey, Caucasus and Central Asia l EBRD l 2018
Strengthening the EBRD’s approach to innovation and innovation policy in Turkey