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SME Financial Inclusion for Sustained Growth in the Middle East and Central Asia
Author:
Mishel Ghassibe null

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Maximiliano Appendino
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Samir Elsadek Mahmoudi null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2019: Issue 209
Language:
English
Publication Date:
27 Sep 2019
DOI:
https://doi.org/10.5089/9781513509112.001
ISBN:
9781513509112
ISSN:
1018-5941
Pages:
23
Keywords:
WP; SME financial inclusion; Small and Medium Sized Enterprises; Financial Inclusion; Economic Growth; monetary policy transmission; growth gain; output gap; SME Financial inclusion index; labor productivity gain; SME employment; employment growth; Small and medium enterprises; Labor productivity; Productivity; Employment; Middle East and Central Asia
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper offers empirical evidence that greater financial inclusion of small and medium enterprises (SMEs) can promote higher economic growth and employment, especially in the Middle East and Central Asia regions. First, we show that countries with higher SME financial inclusion exhibit more effective monetary policy transmission and tax collection. Second, we find substantial employment and labor productivity growth gains at the firm level from access to credit, gains that are higher for SMEs. We also obtain evidence of a substantial positive impact on SME employment and labor productivity growth from improved credit bureau coverage and insolvency regimes. Finally, cross-country aggregate evidence confirms the employment and growth gains from SME financial inclusion, which appear larger in the Middle East and Central Asia than in other regions.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund