World Bank sees business climate as main tool for SME support

New World Bank research findings break away from the traditional view that subsidizing small and medium-size enterprises (SMEs) fosters growth and poverty alleviation. Researchers Beck and Demirgüç-Kunt recommend that countries focus on improving the overall business climate for all firms, while also expanding access to finance for SMEs. ”Policymakers in developing countries are very interested in helping the SME sector and the World Bank is often involved in designing SME strategies,” says Asli Demirgüç-Kunt, Senior Research Manager (Finance) at the World Bank, ”Our research takes a much-needed look at the effect of SMEs on development, their growth constraints, and policies to overcome these constraints—areas inadequately researched until now.”