Small and medium-sized enterprises form the backbone of the economy in many developing countries. However, they often lack the capital necessary to grow and create jobs. In addition, around 2 billion people worldwide are still not adequately supplied with financial services.
MSMEs as the engine of the economy
Small and medium-sized enterprises (SMEs) play a key role in the economies of developing countries. They represent the majority of all registered companies and are responsible for more than half of all jobs. Nevertheless, their access to financing is often severely restricted.
Of the approximately 2 billion people who still do not have adequate access to financial services, 1.1 billion are women. In sub-Saharan Africa, up to 80% of the population has no access to formal financial services as these countries have no (or insufficiently functioning) local financial and capital markets.
OeEB's financial inclusion and MSME strategy
In the 2024-2028 strategy period, OeEB is therefore focusing on the provision of financing for MSMEs (micro, small and medium-sized enterprises) and the financial inclusion of those who do not yet have access to formal financial services.
As it is not practical to work directly with small- and medium-sized enterprises in developing countries using the instruments available to us due to the high transaction costs, OeEB relies on the financial sector as an intermediary or on investments in relevant funds specialising in MSME financing. Local banks have better access to on-site companies. This not only enables us to reach a large number of micro-, small- and medium-sized enterprises, but also makes an important contribution to strengthening the local financial sector and the creation of jobs.
Particular attention is paid to the responsible treatment of clients, such as transparency and client protection based on the internationally recognised "Client Protection Standards" and corresponding client protection certifications. These aim to ensure that microfinance complies with responsible and sustainable financing practices i.e. to prevent potential over-indebtedness of borrowers and ensure the respectful treatment of clients.
Effective know-how development
Regarding financial intermediation, we place special focus on the qualitative development of our existing customers. We support our customers in an advisory capacity over the entire project term. Development banks not only provide local banks and funds with capital, but also engage in capacity building, provide advice and training and support the development of products tailored to SMEs.
Within this focus area, suitable partners are provided with support in developing expertise by means of consulting services (technical assistance). Here, our main concerns include obtaining certifications, improving organizational and operational structures, introducing and expanding environmental and social management systems, corporate governance structures, human rights issues and the development of target group-specific products. In cooperation with other development banks, OeEB also supports sector initiatives wherever possible, for example to further improve the microfinance sector of a country.
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