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Excerpted from infoDev's study of Financing Technology Entrepreneurs and SMEs in Developing Countries: Challenges and Opportunities.

The results of this study point to a number of measures that could help to alleviate the financing gap for SME in the developing world. The recommendations can broadly be characterized facilitating better access to specific forms of financing and as improving the interaction between supply and demand. Given the nature of the infoDev program, these recommendations involve "soft" interventions, i.e. those involving the deploymeny of technical assistance resources.

Recommendations include:

1. Improving access to equity financing through:
   • Schemes to mitigate the risks of early-stage investing
   • Mechanisms to alleviate the transaction costs of small deals
   • Supporting the formation of business angels networks
2. Promoting a wider use of quasi-equity
3. Facilitating access to bank financing
4. Improving the interaction through supply and demand through:
   • Disseminating economic and financial information on ICT/ICTE firms
   • Enhancing capabilities to deal with financial institutions

For extended discussion, please download the entire PDF.