SME Financial Inclusion for Sustained Growth in the Middle East and Central Asia

By Mishel Ghassibe, Maximiliano Appendino, Samir Elsadek Mahmoudi

September 27, 2019

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Mishel Ghassibe, Maximiliano Appendino, and Samir Elsadek Mahmoudi. SME Financial Inclusion for Sustained Growth in the Middle East and Central Asia, (USA: International Monetary Fund, 2019) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper offers empirical evidence that greater financial inclusion of small and medium enterprises (SMEs) can promote higher economic growth and employment, especially in the Middle East and Central Asia regions. First, we show that countries with higher SME financial inclusion exhibit more effective monetary policy transmission and tax collection. Second, we find substantial employment and labor productivity growth gains at the firm level from access to credit, gains that are higher for SMEs. We also obtain evidence of a substantial positive impact on SME employment and labor productivity growth from improved credit bureau coverage and insolvency regimes. Finally, cross-country aggregate evidence confirms the employment and growth gains from SME financial inclusion, which appear larger in the Middle East and Central Asia than in other regions.

Subject: Economic sectors, Employment, Financial inclusion, Financial markets, Labor, Labor productivity, Production, Productivity, Small and medium enterprises

Keywords: Economic Growth, Employment, Employment growth, Financial Inclusion, Growth gain, Labor productivity, Labor productivity gain, Middle East and Central Asia, Monetary policy transmission, Output gap, Productivity, Small and medium enterprises, Small and Medium Sized Enterprises, SME employment, SME financial inclusion, SME Financial inclusion index, WP

Publication Details

Pages:

23
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2019/209
Stock No:

WPIEA2019209
ISBN:

9781513509112
ISSN:

1018-5941

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