The COVID-19 crisis delivered an unprecedented shock to the global economy, and SMEs and entrepreneurs have been at the heart of the impact. In 2020 and through 2021, depressed demand from repeated lockdowns, travel restrictions, and weakening consumer confidence, alongside disruptions to supply chains, significantly impacted business operations and balance sheets. These impacts ultimately resulted in liquidity constraints that were particularly acute among SMEs. During this time, measures implemented by governments, monetary policy authorities and public financial institutions were very important in providing SMEs with liquidity and other types of support, for example wage subsidies, to help them weather the crisis.
Nearly two years into the pandemic, the global recovery is underway. However, the war in Ukraine, whilst first and foremost a humanitarian crisis, is also having significant economic impacts. It is affecting financial and energy markets, supply chains and trade, and driving inflation, especially in energy prices and downstream sectors, all of which have important implications for SME operations and performance.
These impacts are exacerbating previous risks that already threatened a balanced recovery from COVID‑19. They also reinforce the importance of financing investments that can boost the capacity of SMEs and entrepreneurs to build more resilient economies, and the need for government recovery packages to continue to provide targeted support to viable SMEs and entrepreneurs in need.
This 10th anniversary edition of Financing SMEs and Entrepreneurs 2022: An OECD Scoreboard outlines the unprecedented increases in SME bank lending supported by governments, particularly in 2020, and shows that there has been a fall in alternative forms of debt. It examines the evolution of SME support during the course of the COVID-19 crisis, revealing that the volume of SME-focused policies in recovery packages is diminishing, compared to measures taken earlier in the COVID-19 crisis.
Our findings show that efforts to diversify SME financing instruments and sources must continue in order to strengthen SME resilience to current and future shocks and enable them to optimise the strength and the quality of the recovery and future growth. The forthcoming update of the G20/OECD High-Level Principles on SME Financing can help. Efforts to address the challenge of accelerating the green transition, which cannot succeed without the participation of SMEs and entrepreneurs, must also be stepped up. The new OECD Platform on Financing SMEs for Sustainability will make an important contribution in this regard.
In this complex environment, the OECD will continue to monitor closely the trends in SME and entrepreneurship finance. We will pursue efforts to enrich our analysis through increased country coverage and the collection of more granular data on different financing instruments and specific segments of the SME population. In this way, we will enhance our support to governments to ensure responsive policies that keep pace with the rapid developments in SME and entrepreneurship finance.
Mathias Cormann
OECD Secretary-General