Creating the Conditions for Innovation by Enterprises

The financing of small and medium enterprises (SMEs) and equity markets can play a critical role in fostering economic productivity by financing innovation. That's the central premise of a new World Bank Group paper, which discusses the components of an SME-friendly market architecture and links to policies that foster a new class of investable equities.

More than 24 countries in emerging markets operate separate boards and exchanges aimed at SMEs, the paper says. But only a few SME exchanges function properly, providing coveted fresh capital and liquidity. The key steps to building an efficient exchange to provide risk capital for SMEs are addressed in detail.

Comments

[Chris Moyseos]

Enterprises which are newly listed in emerging countries with also newly set up and regulated stock exchanges are hindered by a lack of market makers able to take the risk in represented a bid/offer on a listing. Its not just markets and a basic broking service that is required but market makers. In other words, secondary risk takers (behind the enterprise).

[Beatrice]

What about a gateway to link social entrepreneurs in emerging market with investors in order to foster development, increase returns and create new dynamics? I would like to have your opinion!