Financing SMEs in Africa: Rethinking the Role of Development Finance Institutions

Florian Léon
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Florian Léon: FERDI - Fondation pour les Etudes et Recherches sur le Développement International

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Abstract: In Africa, small and medium-sized enterprises (SMEs) face a chronic financing gap that hinders their growth and the continent's economic development. Development Finance Institutions (DFIs) are often seen as a solution to bridge this gap, particularly through indirect support to local banks. However, an in-depth analysis of their impact reveals mixed results. While targeted beneficiaries benefit from these programs, it is at the expense of other borrowers. There is a need to rethink the support for these DFI-intermediated financing schemes aimed at supporting the SME sector.

Keywords: DFI; Development Finance Institutions; Africa; Small and medium-sized enterprises SMEs (search for similar items in EconPapers)
Date: 2025-04-08
New Economics Papers: this item is included in nep-afr, nep-ent, nep-fdg and nep-sbm
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Published in 2025

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