SME Finance Challenge: Unlocking Private Finance for Small and Medium Enterprises
The G20 and Ashoka’s Changemakers, with support from the Rockefeller Foundation, launched an online competition to ?nd the best models worldwide for public-private partnerships that catalyze ?nance for small and medium enterprises (SMEs). The G-20 SME Finance Challenge, the ?rst ever competition launched by the G-20, is a unique ?nancial inclusion e?ort aimed at giving small entrepreneurs a chance to grow their businesses.
The Canadian Prime Minister Stephen Harper announced the competition and pledged $20M from Canada to scale-up the winning “Small and medium enterprises are the single largest contributor to employment and job creation, in Canada and around the world,” said Prime Minister Harper. “This G-20 initiative will help provide developing countries with the access to ?nancing they need to get their small businesses up and running.”
Only an estimated 20 percent of small ?rms in low-income countries have access to credit. SMEs are often too small to attract commercial bank or investor interest, but too large to bene?t from micro?nance products. To date, few scalable solutions to support this “missing middle” tier of businesses have been found.
The G-20 SME Finance Challenge is a unique competition that is asking the private sector to identify path-breaking models that make public programs more e?ective in leveraging private ?nance. Private ?nancial institutions, investors, companies, foundations and civil society organizations are all invited to submit proposals. Successful entries will demonstrate: innovation, leverage, scalability, social and economic impact, and sustainability.
The G-20 and Ashoka’s Changemakers invite entries now until August 25, 2010 at changemakers.com/SME-Finance. Details on guidelines and criteria for the proposals can be found on this website. Up to 15 submissions will be selected as winners. Challenge winners representative of all regions (Africa, East Asia and the Paci?c, Europe and Central Asia, Latin America and the Caribbean, Middle East and North Africa, and South Asia) will be invited to the November 2010 G-20 Summit in Korea to be recognized for their innovative ideas. Winners will then be connected with donors and investors at an SME conference in Germany following the Korea Summit.
The G-20 is collectively committed to mobilizing the public share of the funding needed to implement winning proposals from development banks and interested bilateral donors. IFC and the World Bank, the Asian Development Bank, the Inter-American Development Bank Group, the African Development Bank and the European Bank for Reconstruction and Development have all indicated their support for implementing scalable and sustainable SME ?nancing proposals, including those from the Challenge, in partnership with the private sector.
“Ashoka attracts a marketplace for innovation,” said Diana Wells, Ashoka’s President.“We believe that there are a host of unknown brilliant ideas that are providing critical ?nancial support to the best small companies that are changing the world. The G-20 and Ashoka’s Changemakers are committed to ?nding them and bringing them to the world’s attention.”
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