The intensity of the Coronavirus disease 2019 (COVID-19) shock has clearly varied among micro, small, and medium-sized enterprises (MSMEs). On a more positive note, the COVID-19 crisis has accelerated the digitalization of many MSMEs and fostered their participation in digital ecosystems and marketplaces. In response to the emergency, governments have quickly introduced a wide range of policy and regulatory measures to financially support local MSMEs. A few countries have effectively leveraged digital technology and public data sharing to better serve MSMEs through various financing schemes. Private market participants, including traditional lenders and FinTech and BigTech firms, have played a leading role in assisting MSMEs throughout the crisis. COVID-19 has started to reshape the market dynamics of the MSME finance ecosystem, acting as a catalyst for the digital transformation of many traditional financial intermediaries. However, the crisis is still ongoing, and to build a more conducive, resilient, and inclusive ecosystem for digital MSME finance in the post COVID-19 era, policymakers and regulators should explore different policy options explained in this report. This report presents a stocktaking of various illustrative cases and examples that highlight policy and regulatory approaches as well as private sector initiatives in G20 and non-G20 countries. Some of the cases included institutions and their ecosystems with solutions grid supporting MSMEs globally such as member Ant Financial, Kabbage, Paypal, Visa, and others such as Stellar, Click Pesa and Tribal Credit among others.
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Source: IFC
Image: IFC