Workshop on Improving Access to Finance for SMEs in the Asia-Pacific Region Concluded with Success
On June 16-17, Workshop on Improving Access to Finance for SMEs in the Asia-Pacific Region, co-sponsored by the Chinese Ministry of Finance, the Australian Treasury, Bank Indonesia and the Korean Ministry of Finance and Economy, organized by the World Bank Institute and AFDC was held with a complete success at the Shanghai National Accounting Institute. An audience of nearly 70 people consisting of government officials from finance ministries, central banks, banking and financial sector regulation/supervision agencies and SME agencies; private sector representatives from commercial banks, SME financial institutions such as private funds, SME boards, credit cooperatives, and VC firms, and policy researchers interested in SME financing from ten APEC economies, including China, Indonesia, Malaysia, Peru, Philippines, Thailand, Russia attended the workshop.
Small and Medium-sized Enterprises (SMEs) play a vital role in both developing and developed economies in the APEC region. Financing has been identified in many studies as one of the most important factors determining the survival and growth of SMEs in this region as elsewhere in the world. Access to financing allows SMEs to undertake productive investments to expand their businesses and to acquire the latest technologies, thus ensuring their competitiveness and that of the nation as a whole. Poorly functioning financial systems can seriously undermine the microeconomic fundamentals of a country, resulting in lower growth of income and employment. While many developed economies in the Asia-Pacific region have more advanced financial systems and better access to finance for SMEs, many developing economies are struggling with setting up the right financing policies and institutions such as credit guarantee system and property market; strengthening the banking sector capability for SME financing; establishing new markets for technology-based SMEs; and leveraging private resources for SME financing.
In the two-day workshop, experts from the World Bank, China Development Bank, Shanghai Financial Office, SME Bureau of Bank Indonesia, SAIF Partners, Clearwater Capital Partners and the Shanghai United Assets and Equity Exchange delivered wonderful speeches on themes like new trends and key challenges of SME financing in the Asia-Pacific region, the role of government in SME financing, private fund and SME financing, financing instruments for technology-based SMEs, property market and SME financing, and key elements and strategy of building a SME financing system. Delegates all took active part in the workshop discussions to exchange their respective experience as well as challenges they face in improving access to finance for SMEs in their organization and their nation.
The workshop ended with a wrap-up speech given by the Lead Economist Mr. Fan Qimiao from the World Bank Institute. He pointed out that there are a large number of SMEs in each industry and they have different financing needs at different stages of development. Each country should focus on developing a diversified financial system which can provide varied means of financing to SMEs instead of relying on bank loans only. During this process, there are things that a government should do or should not. For example, a government should strengthen financial infrastructure building, especially IT infrastructure building, such as the establishment of credit bureaus; a government should facilitate capacity building of financial institutions and help them develop lending businesses to SMEs. But government should not set a lending rate ceiling and offer direct credit and credit guarantee, etc.
