Definition ∞ The SME Financing Gap refers to the shortfall in available capital and credit for Small and Medium-sized Enterprises. This gap occurs when traditional financial institutions are unwilling or unable to provide adequate funding due to perceived risks or high administrative costs. It restricts business growth, innovation, and job creation. Addressing this gap is crucial for economic development.
Context ∞ The state of the SME Financing Gap remains a persistent challenge globally, particularly in emerging markets, despite various government initiatives. A key discussion involves the potential for decentralized finance and blockchain-based lending platforms to provide alternative funding avenues. Critical future developments include the adoption of innovative credit scoring models and tokenized assets to facilitate more efficient and accessible financing for SMEs.
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