Small- and Medium-sized Enterprise Development: Sector Strategy (1995)

This Strategy (GN-1885-corr) aims to support the competitiveness of Small- and Medium-size Enterprises (SMEs) so that they may contribute to long-term growth and employment. Most countries in the region are undergoing reforms that are opening their economies to greater international competition. Bank actions will be directed at helping SMEs to move from protection to competition and should focus on the following two main areas: (1) Creation of a level playing field: in order to promote the development and growth of SMEs the institutional and regulatory barriers which are biased against them should be reduced. The key policy areas are in input markets (capital, labor availability and qualifications, technology, production inputs), output markets (pricing, anti-competitive policies, access to market information), and regulations (tax, tariffs, procurement, legal, capital movements). (2) Compensation for unfavorable position by means of: a) Lowering transactions costs of business, enhance access to credit, eliminate unnecessarily restrictive labor practices; b) Targeted programs by providing services and information; and c) Transfer of techniques and institution building.