MEDIA RELEASE PR41911
G-20's New Approach to Lack of SME Financing
WASHINGTON, Oct. 28 /PRNewswire-AsiaNet/ --
If there is one single key to reducing world poverty, creating jobs and
wealth, and ensuring a global economic recovery it could be this: making sure
the world's small and medium sized enterprises (SMEs) succeed.
Yet the financial sector essentially ignores these businesses. They are
deemed too informal, or too risky, too small, or too big. And without the
funding needed to grow, the vast majority of them will fail.
This must change. The G-20 countries know this, but tackling this complex
challenge has proved difficult. Until now.
Partnering with Ashoka's Changemakers, a pioneer in online global
competitions to solve social problems, the G-20 issued an open call for
solutions to help unlock financing for SMEs - The G-20 SME Finance Challenge
deep creativity and from many angles. The best of them will be scaled up and
expanded with millions of dollars and introduced at the Seoul Summit.
These solutions will pull millions into the middle class and stabilize
the world economy. Still, SMEs have the power to do much more.
In Haiti, for example, when the earthquake inspired the world to give,
SMEs were already picking up the pieces. Thanks to an existing relationship
with the affected population and a vested interest in promoting a speedy and
lasting recovery, they are the critical first-responders. And they stay long
after the TV cameras go. Local companies are beginning to rebuild the
nation's decimated power infrastructure, like RePower Haiti
long-term fixed price contracts to renewable energy SMEs repairing the power
grid and creating jobs.
SMEs employ the very business practices the world talks so much about but
has trouble implementing: environmental sustainability, human rights, and
social progress.
One SME, in Brazil, protects the Amazon rain forest by employing
indigenous rubber harvesters using traditional practices to produce latex
profitably while preserving the forest. Just five percent of the world's
population, but nearly one-third of the extremely poor, indigenous
near our planet's greatest natural resources. This kind of small business
solution, replicated many times over, would make a powerful one-two punch.
Other SMEs are solving the world's housing crisis
revolutionizing property rights
We need many more of them. Women entrepreneurs repay their loans more
consistently than men and reinvest more of their profits into their
businesses. Women workers invest more of their income - up to 90% - in their
families, and their education, improving their standing, and adding to their
communities' economic and social stability.
Solving the SME finance conundrum is especially critical now: The global
economy has been rocked, foreign aid is way down, and we are all increasingly
interconnected. Small and medium sized businesses are leading the way to our
future. They must succeed.
Many more solutions, statistics and resources can be found through Sarah
Mintz (smintz@ashoka.org), +1-415-939-0028, and here:
SOURCE: Ashoka's Changemakers
CONTACT: Sarah Mintz
+1-415-939-0028
smintz@ashoka.org
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