Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109602
Authors: 
Shinozaki, Shigehiro
Year of Publication: 
2012
Series/Report no.: 
ADB Working Paper Series on Regional Economic Integration 104
Abstract: 
Small and medium enterprises (SMEs) stimulate domestic demand through job creation, innovation, and competition; thus, they can be a driving force behind a resilient national economy. In addition, SMEs involved in global production supply chains have the potential to encourage international trade. Prioritizing SME development is therefore critical for promoting inclusive economic growth in most economies in Asia. Adequate access to finance is crucial for SMEs to survive and eventually grow beyond their SME status. In Asia, the reality is that SMEs have poor access to finance. It is one of the core factors impeding SME development. Information asymmetry between lenders and SME borrowers increases adverse selection and moral hazard risks for financial institutions, and is responsible for widening the supply–demand gap in SME financing. Given the diversified nature of SMEs, there is no one-size-fits-all financing solution. The improvement of lending efficiency and the diversification of financing modalities can help expand SMEs’ access to finance, particularly given the largely bankcentered financial system in Asia. This paper discusses a new regime of SME finance amid an era of global imbalances, with empirical analyses of bank financing for SMEs in select Asian countries.
Subjects: 
Global imbalances
financial inclusion
access to finance
growth-oriented SMEs
SME finance
supply–demand gap
diversified financing
JEL: 
F43
G01
G21
M13
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/igo
Document Type: 
Working Paper

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