An action statement to help small and medium-sized enterprises was launched at a conference on “Better Financing for Entrepreneurship and SME Growth” held in Brazil on 27-30 March 2006 (see previous edition, No. 254).

Access to financing continues to be a significant impediment to the creation, survival and growth of small and mediumsized enterprises (SMEs). Although the role of smaller firms in innovation and employment cannot be underestimated, from a bank’s point of view SMEs tend to have a high risk profile, especially innovative ones.

“Today every invention is received with a cry of triumph which soon turns into a cry of fear.” Bertolt Brecht’s much quoted comment would probably capture the mood of today’s German venture capitalists, who, if recent spending trends are a sign, may only just be recovering from the fright of the new economy’s collapse in 2000-2001.

“Small is beautiful.” It is not unusual these days to apply this much quoted observation to the needs of small and medium enterprises. Indeed, SMEs are now very much in the public policy limelight, and when you consider that they account for over 95% of enterprises and 60%-70% of employment in OECD countries, it is easy to see why.