The G20 Global Partnership for Financial Inclusion (GPFI) has released an Action Plan for Micro, Small, and Medium Enterprise (MSME) Financing, a voluntary, nonbinding framework urging G20 and interested non-G20 countries to intensify efforts to close the MSME credit gap, estimated at USD 5.7 trillion in emerging market and developing economies in 2019 (19% of GDP), with women-owned or women-led MSMEs accounting for 34% of the gap. Building on the 2015 G20 SME Action Plan, the update broadens the focus from core credit market infrastructure to a more holistic agenda that supports diversified debt and equity funding, leverages fintech and digital public infrastructure, and integrates a gender lens. The plan sets out eight enabling-environment action areas, including expanding credit reporting systems to accommodate alternative data and nonbank lenders, modernizing secured transactions frameworks and digitized collateral registries, and developing regulatory and supervisory approaches for nonbank and digital providers. It also calls for frameworks for equity financing, crowdfunding and SME markets where relevant, tailored and lower-cost MSME insolvency regimes, competition measures such as open finance or open banking and, in some contexts, public-backed financing marketplaces, and strengthened conduct, consumer protection, cybersecurity and data-privacy regimes. Fintech is presented as an enabler of scalable, data-driven MSME lending and movable-collateral finance, while the document flags constraints on long-term and equity financing and risks including cybersecurity, data misuse and potential algorithmic bias. The framework focuses on financing for formal enterprises and does not cover business formalization, individual financial inclusion, insurance, or macroeconomic and fiscal policy, and it treats MSME climate finance as a separate workstream. On targeted financial interventions such as credit lines, guarantee schemes and investment programmes, the action plan recommends stronger MSME and gender-disaggregated data, thorough diagnostics, an emphasis on financial additionality and private capital mobilization with direct lending reserved for exceptional cases, sparing use of concessional finance, better use of donor and blended finance, complementary capability-building for MSMEs and intermediaries, and more robust monitoring, evaluation and coordination mechanisms. A second phase, creating a simple and flexible framework to measure implementation, is to be developed in 2025.

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