The Arab Monetary Fund (AMF), in cooperation with the Middle East and Central Asia Department of the International Monetary Fund (IMF), is organising on Monday a high-level workshop on enhancing financial inclusion and small and medium-sized enterprises’ (SMEs) development in Arab countries.
The AMF said in a statement that the session agenda includes a number of important topics, such as discussing aspects of enhancing access of SMEs to finance from official channels, as this sector is one of the most important pillars of the economy in most countries of the world, as well as one of the most important areas of job creation.
These projects have positive repercussions on improving financial inclusion and enhancing financial, economic, and social stability. SMEs account for more than 95% of total enterprises in the vast majority of the world and contributing 33% to the GDP of developing economies.
He added that the workshop will also discuss many aspects that can help increase the bank credit for SMEs, including the provision of government support; macroeconomic stability; financial sector safety; the existence of a competitive banking system; regulatory and legislative reform, as well as the role of information systems. He pointed out that a stable economic environment and a strong financial structure for the financial sector will enhance SMEs’ access to bank credit.
In this context, according to the AMF, the workshop will also discuss developments related to the opening of alternative official channels for SMEs, to facilitate and enhance their access to finance, where there is a need for this sector to find funding channels to compete with traditional channels. This is especially after what the world witnessed following the global financial crisis, the recent developments in the field of digital finance, and the applications of modern financial technologies.
It added that modern financial technologies offer new opportunities to enhance the access of SMEs to credit, noting that crowdfunding is one of the most innovative channels that can contribute to enhancing the access of SMEs to finance. Where crowdfunding platforms in developing countries play an important role in financing innovation, which is a key driver of increased productivity and competitiveness.
The AMF expects crowdfunding platforms to enable developing countries to reduce the challenges of financial intermediation and allow individuals to make direct contributions and investments in projects they wish to invest in.
According to the AMF, the workshop will also discuss opportunities offered by modern technology companies to provide financing for small enterprises, and the corresponding risks that may arise from the increased reliance of SMEs on solutions provided by modern financial technologies, such as cyber security risks and credit risks.
“Another aspect that will be addressed by the workshop is the role that financial markets can play in providing financing for SMEs, and identifying the experiences in this regard,” the statement read.
For his part, Director General of the AMF, Abdul Rahman Bin Abdullah Al-Humaidi, stressed the importance of the topics to be discussed in the light of the critical role played by SMEs in promoting sustainable economic development and enhancing financial and social stability.
He praised the support and attention given by the governors of central banks and Arab monetary institutions, to provide national programmes and initiatives to support this important sector, stressing that the workshop represents an opportunity to exchange experiences and expertise between various institutions concerned in Arab countries.