In its fifth annual Scoreboard, released on Thursday, the OECD noted that the situation has been improving for Small and Medium Sized Enterprises, compared to the downswing seen during the global financial crisis. But it adds that overall credit conditions remain challenging and access to external finance continues to be much tighter for SMEs than for larger firms.
OECD Secretary-General, Angel Gurria, pointed out the vital role played by SME's in economic growth and social inclusion.
"SMEs typically account for more than half of business sector activity and around two thirds of employment. Yet business dynamics have been slowing in most of our economies, limiting the contributions that SMEs can make to investment growth, jobs and social inclusion, just at the time when we need it most, just at the time when we need to accelerate."
Gurria stressed that a helpful regulatory framework, stronger entrepreneurship and markets, networking skills, and access to finance are essential in creating a level playing field for SMEs and enable them to achieve their potential.
His views have been echoed by Zhou Xiaochuan, governor of China's central bank. Zhou points out that financial institutions in China have adopted targeted credit-easing measures to diversify funding options.
Angel Gurria made a point of praising China in leading the way, saying SMEs must remain an integral part of the G20 structural agenda when leaders of the world's 20 largest economies gather in Hangzhou, China, in September.
China Central Bank Governor, Zhou Xiaochuan, says he expects the G20 meetings to make significant progress in this area.
"On the investment agenda, we encourage developing countries diversify financing instruments for SMEs and would like to produce a G20 policy guidance. On the financial inclusion agenda, we ask GPFI (the Global Partnership for Financial Inclusion) to come up with a specific plan to implement the G20 action plan on SME financing endorsed by the G20 leaders last year."
GPFI refers to the Global Partnership for Financial Inclusion.
Zhou further added China would continue to work with international organizations such as the OECD to further boost SMEs.
Xiaohong, CRI, Washington DC.
