Empowering Micro, Small, and Medium-Sized Enterprises for Global Trade Resilience

Strategic Insights -

In the current polycrisis of economic shocks, supply chain disruptions, climate change, and geopolitical uncertainty, micro, small, and medium-sized enterprises (MSMEs) form the backbone of the global economy, accounting for 95% of all businesses and 60% of global employment. However, they face persistent barriers to fully benefiting from international trade, including limited access to finance, complex regulations, and poor digital infrastructure. The World Economic Forum emphasizes the need for stronger international coordination to overcome these barriers and ensure that MSMEs, especially those in the least developed countries (LDCs), are not left behind.

Key Takeaways:

  • The MSME Group has improved access to trade information through the Trade4MSMEs and the Global Trade Helpdesk platforms, offering guidance on procedures and business intelligence.
  • The new WTO Tariff and Trade database gives MSMEs detailed access to tariff and import data, including recent tariff actions by WTO Members.
  • The International Trade Centre (ITC) has facilitated MSME trade integration, supporting the participation of over 5,000 MSMEs in trade and market intelligence training, and over 2,400 enterprises improved their competitiveness with nearly 70% reporting positive business outcomes.
  • Access to finance is the biggest hurdle MSMEs face, with the MSME Group facilitating exchanges of best practices to improve cross-border payment solutions and financing mechanisms.
  • The Enhanced Integrated Framework (EIF) is bridging the financing gap through targeted support, including the District Commercial Services Project in Uganda, which improved MSMEs' access to commercial services and trade-related financial information, leading to a 100% increase in the median wage bill.
  • Digital trade presents major opportunities for MSMEs, but the digital divide remains a challenge, with the MSME Group addressing this issue through cyber-readiness, e-document recognition, and paperless trade initiatives.
  • Promising examples of well-targeted support include Fairafric, a Ghanaian-German chocolate company, which tackled supply chain issues through full local production in Ghana and innovative trade finance solutions.
  • Strengthening MSME resilience in times of polycrisis requires stronger trade policy coordination, scalable financial solutions, digital trade acceleration, and capacity-building to support MSMEs in market linkages and export readiness.

Statistics:

  • MSMEs account for 95% of all businesses and 60% of global employment.
  • The IFC disbursed $64.4 million in loans to MSMEs in 2023, bringing the total MSME loan size to $353.2 billion, with a pivot on women-owned enterprises receiving almost 10% of the total portfolio.
  • The EIF-supported District Commercial Services Project in Uganda led to a 100% increase in the median wage bill, driven by both higher wages and increased employment.
  • Over 1,600 MSMEs, including 40% women-led, joined a national e-commerce platform in Senegal, while the Cambodia Trade portal created over 300 jobs in Cambodia.
  • EIF-backed initiatives in the LDCs helped MSMEs access export markets, including a 100% increase in soybean exports from Togo, and the attraction of over $250 million in foreign investment for an export-oriented processing industry sourcing from MSMEs and smallholders.

Sources:

  • World Economic Forum
  • World Trade Organization (WTO)
  • International Trade Centre (ITC)
  • International Finance Corporation (IFC)
  • Enhanced Integrated Framework (EIF)