Sub-Saharan Africa faces an estimated US$ 100 billion financing deficit for MSMEs. Closing this gap will require coordinated action from commercial banks, credit unions, mutual banks, microfinance institutions, SACCOs, fintechs and bigtech firms driving embedded finance solutions. Writes Nicasio Karani Migwi, Founder, MD and CEO, Afromaximus Consult and Afromillenium Awards.
Micro, Small and Medium Enterprises (MSMEs) form the backbone of the global economy, yet their growth is constrained by limited access to finance.
- •According to the March 2025 IFC-World Bank MSME Finance Gap Report, the financing shortfall across 119 Emerging Markets and Developing Economies (EMDEs) stands at approximately US$ 5.65 trillion.
- •This gap represents about 19% of GDP, 20% of total private-sector credit, and 55% of the potential demand for MSME finance, estimated at US$ 10.3 trillion against a supply of just US$ 4.6 trillion. Women-owned MSMEs account for roughly US$ 1.9 trillion, or 34% of the total financing gap.
- •Informal enterprises- often referred to in Africa as the Jua Kali sector- generate an additional US$ 2.1 trillion in unmet demand for finance, equivalent to about 8 percent of GDP in developing economies.
Across developing economies, bridging the gap will require financial institutions to fundamentally rethink how they design, deliver and manage banking solutions for small businesses. In Africa, where MSMEs dominate the economic landscape, the development of world-class MSME banking models is no longer optional but essential.
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