Limited access to finance impedes MSME growth and limit their contribution to the global economy – MicroSave
Empirical studies have shown that MSMEs contribute over 55% of GDP and over 65% of total employment in high-income countries. MSMEs and informal enterprises account for over 60% of GDP and over 70% of total employment in low-income countries, while they contribute about 70% of GDP and 95% of total employment in middle-income countries.
According to a 2010 IFC study, the global estimate for MSMEs was around 455 million with 80% of MSMEs in emerging markets. MSMEs importance to the local and national economy cannot be overlooked as they contribute to GDP, taxes and duties, and employment and jobs. It is estimated that MSMEs employ over 2.2 billion people globally, which is around 50% of the total employed workforce.
Survival statistics for MSMEs are grim, however, as many do not manage to live beyond 5 years. Limited access to finance is one of the challenges impeding MSME growth and limiting their contribution to the global economy. In this publication, we discuss the critical role of MSMEs and clearly show why MSMEs need support as they aide in alleviating poverty and boost sustainable growth in developing countries.