Yevgeniya Savchenko

Expanding Access to Finance : Good Practices and Policies for Micro, Small, and Medium Enterprises

This book on micro, small, and medium enterprise (MSME) finance is intended primarily for government policy makers. It presents a policy framework whereby governments can support increased access by MSME to financial services based on empirical evidence and practices. MSME complain that lack of access to finance constrains their growth and competitiveness. Indeed, financial sector policies often work against the ability of commercial financial institutions to serve MSME, albeit often unintentionally. In many countries, lack of competition in the banking sector limits pressure on banks to reach out to MSME client segments. High risk and high transaction costs-real or perceived-associated with bank lending to MSME likewise constrain access. Often, supervisory and capital adequacy requirements penalize banks for lending to enterprises that lack traditional collateral. Attempts by governments to address these constraints and offset the inequalities in financial sector policy generally have not achieved the desired results. This book lays out a market-based policy framework for governments that focuses on delivery of financial services to MSME on commercial terms. The framework guides governments in focusing scarce resources on developing an inclusive financial sector policy; building sound financial institutions; and investing in a supportive information infrastructure, such as credit bureaus and accounting standards. Examples from around the world illustrate how such a strategy has helped build more inclusive financial systems for all.

Building the Skills for Economic Growth and Competitiveness in Sri Lanka

Despite internal conflict and the global financial crisis, Sri Lanka has made remarkable progress in the past decade, enjoying healthy economic growth and substantially reducing poverty. Moreover, Sri Lankans are the best-educated people in South Asia: the country has a 98 percent literacy rate, widespread access, high completion rates in both primary and secondary education, and gender parity in general education. Chapter two describes the general education and training system in Sri Lanka, especially the TVET sector. Chapter three examines the main drivers of skills demand and skills mismatches and gaps in Sri Lanka. Chapter four studies the relationship between education, training, and labor market outcomes, including skills already available in the workforce. Chapters five and six analyze factors affecting the skills supply system, such as cost, financing, and governance (chapter 5) and private sector provision (chapter six). Chapter seven briefly reviews firm-based training in Sri Lanka based on evidence from the employer survey. Chapter eight assesses workforce development policies in Sri Lanka based on the World Banks Systems Approach for Better Education Results (SABER) framework. Finally, chapter nine provides the summary of main findings and outlines possibilities for the way forward in skills development in Sri Lanka.