A joint report by IFC and the SME Finance Forum, has found that 65 million enterprises, or 40 percent of formal micro, small and medium enterprises (MSME) in developing countries, have an unmet finance need of $5.2 trillion a year. This gap is larger than previously estimated.

The results were presented at the Global SME Finance Forum held in Berlin, Germany, on November 1-3. A record number of about 500 participants from 250 institutions and 80 countries gathered at the forum to discuss impactful and innovative ways to address the MSME finance gap. The SME Finance Forum helps banks, fintechs and development banks learn from each other, link to new business and partnership opportunities, and lead in the industry-policymaker dialogue.

IFC and McKinsey & Company conducted the first comprehensive assessment of the global MSME finance gap in 2010 and assessed the gap at $2 trillion at an aggregate level. The report, which presents new data points compiled by the SME Finance Forum and analyzed by IFC’s research units, focuses on data points from 128 countries, both from the demand and supply side. This has allowed for more accurate, actionable country-level estimates of the gap. Matt Gamser and Minerva Adei Kotei also gave guidance and contributed to this report.