SME Financing in the Mediterranean: Meeting the Challenges Ahead
This paper sets out recommendations to create a conducive business environment for micro, small and medium-sized enterprises (MSMEs) in the Mediterranean.
MSMEs are the driving force behind economic development in the Mediterranean. Several initiatives strive to operationalize key principles for creating a business environment conducive to investment and private sector development in the region. The Union for Mediterranean (UfM) initiative launched in July 2008 in Paris is expected to foster business development and financing opportunities in several sectors.
Recommendations from the UfM initiative highlight the need for:
- Tailored definition of MSME in the South Mediterranean;
- Coherent long-term strategy for inclusive growth and sustainable development;
- More private sector involvement in policy initiatives;
- Multi-dimensional solution that meets the MSMEs different needs;
- Comprehensive assessment of existing schemes in UfM member states;
- Motivating banks to take sufficient risk to finance the real economy;
- Overcoming traditional concepts of microcredit;
- Scaling up strategies that cover all segments of MSMEs.
Finally, the paper stresses the need for innovative investment approaches that depend on the involvement of international institutions and donors.
