Unlocking Small Business Potential: Why Financial Institutions Must Lead the Way

By Qamar Saleem, Global Head of SME Finance Forum

(small.news) — Every time I meet a small business owner—whether in Nairobi, Jakarta, or Bogotá—I’m reminded of the same truth: Small and medium enterprises (SMEs) are the heartbeat of economies.

They create jobs, drive innovation, and anchor communities. However, despite their undeniable importance, SMEs continue to face a persistent, and often paralyzing, challenge: Access to finance.

SME Finance Forum’s Mission: Changing Access to Finance

Founded by the G20 and managed by the International Finance Corporation (IFC), the SME Finance Forum is a global network of over 250 financial institutions, fintechs, development banks, non-bank lenders, policymakers, academia, and knowledge and industry networks.

Our goal is simple but ambitious: To accelerate access to financial services for SMEs by fostering knowledge exchange, scaling innovation, aligning funding sources, and leveraging result-oriented partnerships to ultimately make impact and create sustainable jobs.

This Mission is Deeply Personal

I’ve spent much of my career working with financial institutions and rooted in development finance across emerging markets. I’ve seen firsthand how well-structured financial and non-financial services can transform a family-run business into a regional employer.

I’ve also seen how rigid risk models, outdated credit scoring, data asymmetry, and lack of digital infrastructure can shut the door on opportunity. That’s why I believe financial institutions must not only be part of the solution, but they must also lead it.

The Forum as a Catalyst

The SME Finance Forum is more than a convening platform. It’s a catalyst for change. We drive innovation through our year round activities. Our flagship event, the Global SME Finance Forum, brings together C-Level leaders, policymakers, and innovators from over 100 countries.

Each year, we explore the frontiers of SME finance—from digital ecosystems and green finance to AI-driven credit models and inclusive banking. At a September forum, we will spotlight how financial institutions and policymakers can play a pivotal role in building resilience and creating opportunities for growth for SMEs.

Financial Institutions: From Gatekeepers to Enablers

Too often, financial institutions are seen as gatekeepers—deciding who gets access and who doesn’t. But the most forward-thinking institutions are flipping that script. They’re becoming enablers of growth, using data, technology, and partnerships to reach underserved SMEs while providing them skills to succeed.

Take, for example, the rise of embedded finance. By integrating financial services into platforms that SMEs already use—like e-commerce, logistics, or accounting software—banks and fintechs are meeting small business owners where they are. This isn’t just convenient. It’s transformational.

Or consider the power of alternative data. Traditional credit histories often exclude informal or first-time business owners. But mobile payments, utility bills, and even social media behavior can offer powerful insights into creditworthiness. Financial institutions that embrace these tools are not only expanding their customer base—they’re building more resilient portfolios.

Financial institutions are also extending their services beyond just funding, leveraging partnerships within the entire digital ecosystem to strengthen SME capabilities through training and mentorship.

A Call to Action

If you’re a financial institution reading this, I urge you to ask: Are we doing enough? Are we innovating fast enough? Are we reaching far enough? Are we ignoring the $5.7 global MSME finance gap on the table and not optimizing on this glaring market opportunity?

Supporting SMEs is smart economics. SMEs represent over 90% of businesses and more than half of employment worldwide. When they thrive, economies grow. When they struggle, we all feel the impact.

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