In developing countries, SMEs have great difficulty in obtaining the necessary financial resources to effectively scale up and grow their businesses. For SMEs competing in the ICT industry and ICT-enabled (ICTE) activities, the challenge of accessing growth capital is particularly acute. In the ICT/ICTE sector, industry specific aspects often limit the access to finance such as the high-tech nature of the business, which magnifies the informational asymmetries, or the intangible nature of assets that can be leveraged as collateral for loans.
This report, "Financing Technology Entrepreneurs & SMEs in Developing Countries: Challenges and Opportunities" by infoDev, traces the nature, extent, and root causes of the financing gap that plagues SMEs in the ICT/ICTE industry in developing countries. Results from this study confirm the existence of a financing gap, in the sense that seemingly well deserving ICT/ICTE operators have limited or no access to external financing when the stage of development of firms, the particular features of the various sub-sectors, and the conditions prevailing in different countries are taken into account.
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