Investigating the Financial Capabilities of SMEs : Lessons from a 24-Country Survey
Financial capability goes beyond the knowledge of financial concepts and includes behaviors, skills, and attitudes that enable sound financial decision making. Owners and managers of small and medium enterprises (SMEs) require a distinct set of fin...
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| Format: | Technical Paper |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/884291527663849364/Investigating-the-financial-capabilities-of-SMEs-lessons-from-a-24-country-survey-technical-note http://hdl.handle.net/10986/30058 |
| Summary: | Financial capability goes beyond the
knowledge of financial concepts and includes behaviors,
skills, and attitudes that enable sound financial decision
making. Owners and managers of small and medium enterprises
(SMEs) require a distinct set of financial capabilities in
order to manage finances and grow their businesses
sustainably. Improving the financial capability of SME
decision makers can significantly boost SME growth and
stimulate sustainable economic development in low- and
middle-income countries, especially in areas with large
informal job sectors. This report details a World Bank Group
project that designed and conducted pilot SME surveys in 24
countries and aimed to establish a comprehensive
understanding of SME financial capability that is essential
for designing policies to promote financial health in the
SME sector. The project’s combination of self-assessment and
direct testing methodologies, together with behavioral
questions, yields a comprehensive view of SME financial
capability that clearly identifies the clusters of
vulnerable SMEs and recommended areas of policy intervention
and support. In contrast to the traditional assessments of
SMEs based on their past performance, the project’s new
survey instrument offers identification of strengths and
underperformance at earlier stages of the business
development cycle, enabling early stage targeted policies to
help SMEs improve performance and attract investors and
technical support. |
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