On March 29th, the OECD published the 10th edition of “Financing SMEs and Entrepreneurs 2022: an OECD Scoreboard”, with a focus this year on how the global pandemic impacted SME finance through the analysis of debt and equity of companies, along with framework conditions paired with the policy developments for over 48 nations worldwide.
The findings show that the COVID-19 crisis caused profound disruptions on the global economy, particularly when it comes to SMEs and their challenging recovery attempts through multiple business shutdowns and supply chain disruptions, only to culminate into what is now the Ukrainian war.
Governments and financial institutions provided a crucial lifeline amidst the doubts of recovery, with the OECD report being another tool to help policy makers and other stakeholders evaluate the financing needs of SMEs, the design and evaluation of legislation, and to monitor the implications of financial reforms for SMEs and entrepreneurs over time. For instance, some of the OECD findings show that while the amount of loans for SMEs increased, interest rates and other requirements decreased. Accordingly, alternative sources of finance, such as leasing and factoring, declined significantly, representing a reversal of the pre-pandemic trend.
Lastly, from economic indicators to trends for the short and medium term, the report assesses the evolution of financial help from the rescue to recovery phase, documenting a fall in the level of SME-related support in national recovery packages compared to earlier rescue measures, showing a need to go beyond traditional forms of financing while tackling SME insolvency.
Read the full report here.