Half Title Page -- Title Page -- Copyright -- Contents -- Foreword -- Acknowledgments -- Abbreviations -- I. Introduction -- II. The Mismatch between MSMEs' Demand for and Financial Institutions' Supply of Quality Financial Services -- SME Definitions -- Access to Finance as a Constraint on SMEs -- Financial Sector Policy Distortions -- Banks' Lack of Know-How -- Information Asymmetries -- High Risks of MSME Operations -- III. Good Practices for Addressing MSMEs' Financing Constraints -- Commercial Bank Innovations in Applying Microfinance Technologies -- Approach Is Relationship Based -- Initial Small, Short-Term Loans Are Ratcheted Up Based on Repayment Performance -- Loan Monitoring and Credit Risk Control Methods Are Intensive -- Loan Officers' Incentives Are Tied to Loan Portfolio Performance -- Transaction Costs Are Lowered in Several Ways -- Full-Cost Pricing Is Adopted to Achieve Sustainability -- Other Credit Analysis and Risk Management Techniques -- Emphasis on Cash Flow Analysis to Determine Clients' Ability to Pay -- In-Depth Knowledge of Clients and Their Businesses -- Credit Scoring -- Timely Technical Assistance to Address the Lack of Bank Know-How in SME Finance -- Other MSME Finance Instruments -- Guarantee Funds -- Factoring -- Leasing -- Investor Equity (Venture Capital) -- Factors Underlying the Success of the Institutions Profiled -- Government Commitment and Political Economy for Reform -- Commitment and Leadership within the Institutions -- Learning and Experimentation -- IV. How Governments Can Help Increase Access to Finance -- Set the Stage for Innovation by Establishing a Sound Policy Framework for the Financial Sector -- Liberalize Interest Rates and Promote Competition -- Have Supportive Regulations Regarding SME Banking, Leasing, Factoring, and Equity -- Reduce and Rationalize Direct Public Sector Intervention.

Improve the Legal and Judicial Frameworks -- Strengthen the Institutional Infrastructure -- Support Relevant Training and TA for Interested Financial Institutions -- Provide or Facilitate Initial Financial Support -- Build the Information Infrastructure -- Promote Accounting Standards -- Invest in and Promote Credit Bureaus and Registries -- Invest in Technology -- Evaluate Performance and Incorporate Lessons Learned -- V. Conclusion -- Appendix: Case Studies on Improving Small and Medium Enterprises' Access to Finance -- Case 1. The Kazakhstan Small Business Program -- Case 2. The Agricultural Bank of Mongolia: Restructuring and Expanding through Downscaling -- Case 3. Innovation by the CrediAmigo Program of Banco do Nordeste -- Case 4. ShoreBank International, Ltd. in the Caucasus -- Case 5. Wells Fargo Credit Scoring Model -- Case 6. The Agricultural Cooperative Bank of Armenia -- Case 7. Inter-American Development Bank Microenterprise Global Credit Programs in Paraguay -- Case 8. Bank Rakyat Indonesia -- Case 9. Nacional Financiera and Factoring in Mexico -- Case 10. Venture Capital and Small Enterprise Assistance Funds -- Case 11. Financial Leasing in Serbia -- Case 12. Credit Guarantee Schemes -- Case 13. Credit Information and SME Access to Finance -- Bibliography -- Back Cover.