The world isn’t short of good ideas or businesses, nor of finance. Yet the actual investment needed to fuel growth, jobs and the twin transitions continues to fall short. Can smarter policies on SME financing reignite investment and lead our economies to their best selves?
Investment is on stand-by
Weak investment is not just a post-pandemic hangover. Since the global financial crisis (GFC), business investment has struggled to recover, with real investment across OECD countries still 23% below its pre-2008 trend. No OECD economy has returned to its previous growth path, and SMEs in particular need to harness investment to boost their competitiveness and growth.
A stubborn financing gap
SMEs face a host of barriers when it comes to financing: high transaction costs, limited financial literacy, and a heavy reliance on traditional bank loans, with alternative options rarely used. Many firms struggle to secure even basic working capital, let alone loans or venture capital for strategic investment.
Globally, the scale of the problem is stark. The MSME finance gap stands at USD 5.7 trillion, nearly 19 percent of GDP across 119 emerging markets and developing economies, with 40 percent of formal SMEs considered credit-constrained.
Under those conditions, most small firms prefer to avoid external finance altogether. In Mexico, for example, a 2025 survey by early payment platform C2FO shows that SMEs primarily use early payments to cover operational costs such as inventory and payroll, with smaller businesses most affected. Not luxury purchases or investments in AI, just the basics of everyday business.
A co-ordinated approach focused on three policy priorities
If we want SMEs to be part of the solution to the investment gap, we need to change how we think – and act – on financing, bringing together public and private players.
First, build financial systems that work for SMEs, not just large firms, through stability, predictability and interoperability. Regulations and reporting requirements often vary across borders and sectors, creating costly and conflicting burdens. These hurdles fall hardest on smaller firms. Smarter coordination, such as through an international “GVC Passport” that recognises SMEs as trusted players in global value chains, can help firms scale up and access funding across markets.
Second, bring down the cost of finance and facilitate timely payments. Through credit guarantee schemes, scale-up of microfinance, and better credit information systems, including those driven by Fintech, SMEs can access more affordable loans. At the same time, delayed payments choke off working capital and reduce firms’ ability to plan or invest.
Digital early payment platforms, like those used by C2FO, allow firms to receive payments quickly, often within days, by enabling buyers with surplus cash to pay invoices earlier. When deployed across supply chains, these systems improve liquidity and channel capital towards productivity, not survival.
Third, ensure that financial support is matched with broader support. A new OECD report shows how combining financial and non-financial support and capacity building is particularly effective in boosting SME use of sustainable finance. Likewise, systematically building MSME and local communities’ inclusion into the platform architecture can develop local supply chains and community capacity.
In developing economies, this is often accelerated by leapfrogging over legacy systems, using cutting-edge digital solutions, like mobile payment systems (M-PESA) or advanced energy grids, to align infrastructure with specific local economic advantages (e.g., co-ordinating electricity with agricultural zones), digital infrastructure, and inclusive platforms that bring local suppliers into wider value chains. When these pieces are coordinated, they create a flywheel of investment, productivity and growth.
Building confidence and conditions for investment
Beyond access to capital, reinforcing a level playing field, discouraging protectionism, and supporting institutional mechanisms for financial efficiency will create productivity gains for SMEs, driving inclusive growth and job creation worldwide.
This should be underpinned by a supportive infrastructure. Public infrastructure, including digital infrastructure, plays a vital role as a platform for business investment. This is particularly true in developing countries, where Mission 300 Africa aims to connect 300 million people in Sub-Saharan Africa to electricity by 2030.
By early 2025, the programme had enabled more than 20 million new income-generating activities, including SMEs and processing plants, while improving education and healthcare services for millions. Infrastructure investment, when aligned with local needs, becomes a platform for sustainable enterprise.
Investing in SMEs is investing in the future
Closing the global investment gap will take more than bold targets. It means making it easier for the everyday firm, the family business, the local innovator, the rural entrepreneur, to invest in their future. When SMEs can access affordable finance, they don’t just grow their businesses, they power our economies. Leveraging partnerships, between public and private actors, traditional and non-traditional financial institutions, will help expand the range and accessibility of SME financing needed to reignite investment.
