Nearly 500 million micro and small enterprises (MSEs) are estimated to be operating around the world. Access to credit and other financial services is critical to the growth and sustainability of these businesses, and consequentially to the low-income and vulnerable populations which rely on MSEs for their livelihoods. Yet despite decades of efforts and some notable successes in expanding MSE finance, the credit gap remains an estimated 4.9 trillion U.S. dollars. New technologies are transforming the financial sector, and some could be the keys to enabling business models that can overcome traditional barriers to MSE finance: high operating expenses, low lifetime customer value, and credit risk uncertainty.
