SME Finance Loans for Growth Impact Report 2020
The fourth and final SME Finance Loans for Growth (LFG) impact report shows how small and medium enterprises (SMEs) in emerging and frontier markets benefit from access to finance, as well as how they were affected by the COVID-19 pandemic in 2020.
After four years of annual data collection, the study finds a positive relationship between access to finance and business owners’ ability to buy new assets, launch new businesses, raise the wages they pay to their employees, and increase the proportion of full-time employment. However, SMEs were severely affected by the COVID-19 pandemic and had to resort to several coping mechanisms, including reducing their working hours, temporarily closing their business and laying off employees. In coordination with other players in the impact investing industry, LFG demonstrated flexibility in its repayment schedules to ease the burden of loans on SMEs during the pandemic and support their recovery.