A New Regime of SME Finance in Emerging Asia: Empowering Growth-Oriented SMEs to Build Resilient National Economies

Date: December 2012
Type: Papers and Briefs
Series: Regional Economic Integration Working Papers
Author: Shinozaki, Shigehiro


Small and medium enterprises (SMEs) stimulate domestic demand through job creation, innovation, and competition. As such, they can be a driving force behind a resilient national economy. 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. Yet, in Asia SMEs have poor access to finance, which is impeding their development. 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.


What is needed is a holistic approach to financial inclusion strategies. The relationship between SME promotion and finance is like the wheels of a car: if all components are not spinning in synchronization, a balanced, sustainable, and resilient Asia will not be realized.

Including SMEs at all stages of the formal financial system is beneficial for rebalancing the global economy. Improving financial access for SMEs is expected to bring many benefits, including enhancing production quality, increasing new business opportunities, stimulating investment and consumption at the national level, and mobilizing excess corporate savings. Financing the SME cluster will improve the business efficiency of smaller export-oriented manufacturers. Enhancing access to finance for subcontracted SMEs will promote intraregional trade. These policy-oriented measures at the national level are expected to indirectly accelerate global rebalancing.

Furthermore, establishing financial infrastructure to support micro start-ups and microenterprises will stimulate income gains in low-income households and thus contribute to poverty alleviation, social welfare enhancement, and even the development of the corporate base.

About the series

The ADB Working Paper Series on Regional Economic Integration focuses on topics relating to regional cooperation and integration in the areas of infrastructure and software, trade and investment, money and finance, and regional public goods. The Series is a quick-disseminating, informal publication that seeks to provide information, generate discussion, and elicit comments. Working papers published under this Series may subsequently be published elsewhere.


  • Abstract
  • Awareness of the Issues
  • SME Growth and External Funding
  • Supply–Demand Gap in SME Finance
  • A New Regime of SME Finance
  • Conclusion
  • References