Establishing an Enabling Environment for Financial Sector Development.

Paper | October 31, 2010

This Financial Sector Knowledge Sharing Project (FS Share) paper examines how burdensome microeconomic policies can increase the cost and risk of lending and identify ways to remediate these barriers to facilitate financial sector development.

Through the FS Share Task Order, the USAID Bureau for Economic Growth Agriculture and Trade (EGAT) and Chemonics collaboratively identify financial-sector priorities and develop strategies and programs for growing the financial sector.  This paper describes the experience of USAID programs in Albania, Georgia, Egypt, and Colombia as they apply to the design and implementation of initiatives to improve the policy and regulatory environment for micro, small, and medium enterprises (MSME) access to financial services. It also presents lessons learned from these programs to inform future business enabling environment (BBE) programming to improve the enabling environment for finance and provides a diagnostic checklist to be used as a tool for evaluating and assessing the readiness for and feasibility of reform.