Guidelines for SME Access to Finance Market Assessments (GAFMA)

Abstract

In the area of access to finance for Small and Medium sized Enterprises (SMEs) there are often market imperfections/failures – either as temporary effects or as fundamental structural deficiencies. To identify and analyse these issues, SME Access to Finance Market Assessments (AFMAs) are essential. The purpose of such an assessment is to identify and,if and where possible, quantify the market failures or suboptimal investment situations, and investment needs. Moreover, for the justification of public policy interventions and proposals for the implementation of financial instruments, in particular under the EU regulations for the 2014-2020 programming period, these analyses are gaining importance, i.e. as the so called "ex-ante assessments" have become mandatory under the new Common Provisions Regulation1. The document explains the AFMA framework, its structure and its various analytical tools. Moreover, it provides many relevant sources of information. These guidelines are intended to be a toolbox encompassing good practices and providing practical guidance to perform ex-ante SME finance market assessment; they are not to be seen as the assumption of the only way, but as our "cooking recipe" and a pragmatic approach to tackle the issue of analysing SMEs' access to finance.2,3 This text provides guiding principles and typical approaches for AFMAs from the authors' perspective. These guidelines have been prepared as a benchmark for the own use and for service providers conducting AFMAs on behalf of EIF, thereby ensuring a consistent structure and quality of future analyses. Moreover, they can also provide guidance to market analysts, performing assessments outside the EIF framework. This text has been prepared taking into consideration the requirements of the Common Provisions Regulation (Art. 37(2)), see i.e. Annex 1, but the guidelines cannot guarantee that the AFMA reports, using them as a basis, finally fulfill these requirements