woman sitting at desk sewing Photo by Lorena Velasco - Colombia

Micro and Small Enterprises

From bustling open-air markets across Africa to family-run businesses in Asia and Latin America, Micro and Small Enterprises (MSEs) sustain livelihoods and foster inclusive growth. MSEs play a crucial role in driving economic growth and creating jobs in emerging markets and developing economies, making up nearly 90% of businesses and providing around 70% of employment opportunities.

Despite their economic importance, MSEs remain consistently underserved by financial institutions due to systemic credit barriers, limited digital access, and policies that often prioritize larger businesses. As a result, they face a persistent financing gap estimated at nearly $5 trillion. Many remain excluded from formal financial systems, particularly nano-enterprises and women-led businesses, which struggle with barriers such as limited credit histories, collateral requirements, and digital exclusion.   

However, with the right targeted solutions, there is potential that these barriers can be overcome. CGAP conducted a comprehensive analysis of the key dimensions of MSE finance. On the demand side, we highlight the unique challenges and opportunities faced by nano- and micro-enterprises, as well as women-led businesses, ensuring these diverse groups are not treated as a monolithic block but as unique enterprises with their own set of challenges and opportunities.

Simultaneously, on the supply side, CGAP evaluated a broad spectrum of financial providers from traditional microfinance institutions embracing digital transformation to innovative fintech disruptors deploying cutting-edge business models.  
 

Latest Research

Publication

Resilience for All: Why Inclusive Finance Can't Wait

The world faces urgent challenges as risks intensify and interconnect, amplifying vulnerabilities, especially for low-income populations and small and medium enterprises (MSEs). If left unaddressed, these vulnerabilities can create ripple effects with national, regional, and global consequences. This paper highlights the importance of inclusive finance as an indispensable component of resilience responses, and calls on everyone working on increasing resilience to leverage inclusive finance to enhance the reach, speed, and impact of their work.
Publication

Diverse Paths: Finance for Women’s Nano and Micro Enterprises

Women-led nano and micro enterprises (WNMEs) are vital for providing livelihoods, boosting communities, and driving local economies. However, they face barriers like insufficient start-up capital and limited networking. This publication delves deeper the tailored solutions needed to support their growth based on in depth research in India, Kenya and Uganda.
Publication

Gender-Smart Market Mapping for Nano and Micro Enterprises: A Practical Guide

Segmentation and market sizing helps in allocating development efforts, guide investments, and identify policy gaps for women-led nano and micro enterprises (WNME). This technical guide offers steps to understand the WNME landscape, design targeted products, and foster inclusivity for growth.

Latest Blogs

Blog

The Hidden Costs of Forex Funding: Do Women Pay a Higher Price?

Smaller lenders serve women borrowers best but face high costs, forex risk, and limited scale. In light of this fact, donors and DFIs must expand local currency funding and strengthen risk management to close the gender gap in finance.
Blog

Fueling Micro-Retail: FMCGs & E-Commerce in Action

Fast-Moving Consumer Goods (FMCG) companies have a significant opportunity to enhance their supply chain efficiency, expand their market reach, and improve operational effectiveness by leveraging B2B (Business-to-Business) e-commerce platforms.
Blog

Does Microcredit Drive Jobs Growth? Here’s What the Evidence Shows

Microcredit can help MSEs create jobs and build resilience but often falls short on growth. The Impact Pathfinder highlights credit’s opportunities and gaps, stressing the need for better financial products and support to boost employment.