MSMEs Group discusses digitalization, access to finance for women-owned small businesses
Digitalization was a recurring theme in discussions at a meeting of the Informal Working Group on Micro, Small and Medium-sized Enterprises (MSMEs) on 3 July. Various organizations provided information on digital standards, the advantages of gaining the status of “authorised economic operator”, financial inclusion and sustainable agriculture value chains, with the aim of keeping policymakers informed about ongoing work to support small businesses. In addition, the United Kingdom submitted a communication on exploring best practices aimed at supporting access to finance for women-owned small businesses.
The International Chamber of Commerce (ICC) presented information on its digital standards initiative and underlined the importance of digitalization for MSMEs. The ICC is working with governments to help them adopt legislation in line with the UNCITRAL Model Law on Electronic Transferable Records to create an enabling regulatory environment that encourages paperless trade. The ICC is also working on mapping and aligning standards for trade digitalization. A Certificate in Digital Trade Strategy (CTDS) aimed at equipping policymakers with knowledge to make digital trade work is offered by the ICC Academy.
The International Federation of Freight Forwarders Associations (FIATA) described its experience with digitalizing trade, how digitalization helps MSMEs, and data governance issues. FIATA outlined the benefits that digitalization brings in terms of providing verifiable and reliable electronic bills of lading, reducing costs, and promoting environmentally friendly practices. FIATA explained how digitalizing trade creates an additional layer of security and trust between trading partners.
The United Kingdom presented a paper titled “Supporting Women-Owned SMEs”, which identifies barriers faced by women in starting and growing their business. It outlines eight recommended actions to support financial inclusion for women-owned MSMEs. The paper estimates that GBP 250 billion could be added to the UK’s economy if women started and scaled up businesses at the same rate as men.
Barbados shared its experience implementing a national MSMEs development policy, specifically supporting actions for women entrepreneurs to access training and resources in the agricultural sector. The European Union highlighted an integrated investment initiative that stimulates gender smart finance while Chile, Russia and Moldova also shared their national experiences supporting women-led businesses.
The World Trade Board introduced the findings of a joint publication on Financial Inclusion in Trade Roadmap. The Roadmap identifies five key areas that advance financial inclusion for small businesses. They comprise digital infrastructure, data infrastructure, legal/regulatory infrastructure, technical assistance and new funding sources. Chile was cited as an example where coordinated action to improve the legal infrastructure and digital infrastructure resulted in measurable positive impact on small businesses. In 2012-13, Chile mandated the use of e-invoicing and in 2018-19 simplified certain financial laws. These changes helped to double the amount of finance available to small businesses.
The World Customs Organization (WCO) briefed the Group on its Authorised Economic Operator (AEO) status, which allows small businesses to benefit from expedited customs clearance, greater access to global markets, and risk mitigation. The WCO suggested various ways in which access to AEO programmes could be facilitated for small businesses, including through simplified procedures. Raising awareness of the benefits of AEO programmes among small businesses was also needed, it added. The WCO looks forward to collaborating with the WTO on this issue. Group members agreed to work on a compendium of good practices. Uruguay also presented its AEO programme and MSMEs.
The International Trade Centre (ITC) presented an initiative — the Alliances for Action — which helps smallholder farmers gain resilience and achieve growth. It highlighted lessons learnt from projects completed in Jamaica in the coconut industry, Ghana in the cocoa value chain and Ethiopia in coffee production. The importance of empowering farmer organizations, applying innovative solutions and fostering partnerships were some of the lessons shared. The Alliances for Action initiative also aims to improve MSMEs’ capacity to understand financial requirements for accessing finance.
The Coordinator of the MSMEs Group, Ambassador Matthew Wilson of Barbados, reported on the Group’s activities in celebration of MSME day. Members were encouraged by the Coordinator to consider linking the Trade4MSMEs platform to their national databases. The Small Business Champions were also invited to present their respective projects to the Group. The Informal Working Group is scheduled to meet again on 12 October 2023.