QUESTION OF: Measures to increase access of small-scale enterprises to financial services, including affordable credits following the COVID-19 crisis

SUBMITTED BY: Burkina Faso

CO-SUBMITTERS:Bolivia, Cambodia, Cuba, Colombia, Dominican Republic, India, Indonesia, Lao PDR, Qatar, Namibia, Guatemala, Turkey, UN-Women, United Kingdom, United States of America, Rwanda.




Recognising the government’s role to provide low/no-interest loans to small businesses to protect the economy from further recession,


Deeply convinced that mobile banking is the main opportunity to increase access to financial services for small-scale businesses, such as M-Pesa (originally in Kenya), a successful mobile banking system started in a country with limited financial service access, 


Defining CGS (credit guarantee system) as third-party (in this case the government) credit risk mitigation to lenders through the absorption of a portion of the lender’s losses on the loans made to SMEs (small medium-sized enterprises) in case of default, typically in return for a fee,


Further recognising that certain financial institutions are only accessible with a minimum capital requirement and thus access to these institutions is only possible by increasing revenues and profits for small scale enterprises by introducing education, easy trading, financial incentives and access to relief funds, 


Further recognising that in order to develop formidable financial institutions, economies must be stable, scalable and profitable thus requiring clauses to improve the state of a nation’s economy, 


  1. Calls for governments to enable businesses to expand and prosper thus opening them up to more financial institutions, governments are encouraged to suggest to private businesses that the most efficient way to expand is by developing infrastructure and incentivising investment which may be facilitated by increasing access to low-interest loans, through means such as, but not limited to:
    1. Lowering the federal/central bank interest rates in order to allow riskier/speculative loans such as invoice financing, short-term and personal loans from private banking
    2. Formalising considerable tax relief for any bank offering loans of less than 1.5% interest to small-scale businesses:
      1. With tax cuts being approximately 20-30% of their current amount
      2. Through loans available for low revenue businesses
      3. By increasing the time for said businesses to pay back the loans by approximately 50% which will be judged on a case by case basis; 
  2. Recommends nations set up a national crisis management protocol providing relief funds, targeted at small businesses, to keep a deposit of capital to be used for outcomes such as, but not limited to:
    1. Redistributing tax revenues in order to:
      1. Provide businesses with funds to set up paycheck protection programmes to keep workers on the payroll
      2. Equip organisations with sufficient funds to be able to give out microloans to small businesses in need
      3. Fund other institutions which have the ability to help the economy such as private banking
    2. Reserving a percentage of the taxes paid and the governmental income in case of an urgency in order to protect SSEs from closure and consequently maintaining a lower rate of unemployment, as although a good part of governmental income is targeted to the welfare of the people, it is more convenient to save said population from unemployment while ensuring the development of SSEs in hope for a better long term plan, and if more people are employed, fewer individuals will require the help of welfare;
  3. Calls for nations to grant free access to shipping lanes for landlocked countries in order to allow them to export goods and infrastructure without the burden of tariffs thus allowing higher profits and increased access to large scale financial services which may be accomplished by means such as, but not limited to:
    1. Authorising the use of various seaports or propose the selling of ports to landlocked countries in question in order to allow them to utilise this privilege, as well as incentivising countries with access to shipping lanes to grant the aforementioned access by reducing the taxes they have to pay 
    2. Removing all taxation on products bound for other countries that enter and exit via the coastal nations’ in question
    3. Keeping charges for the utilisation of national services such as highway fees for lorries and train fees for cargo
    4. Facilitating exports in hopes of globalisation and international trade for SSEs
    5. Incentivising small scale enterprises to take advantage of these new developments in order to:
      1. decrease the relative cost of various materials and goods imported from other countries as tariffs will no longer affect them, resulting in lower production costs and thus less stress on small scale enterprises
      2. expand this possibilty to smaller firms through the exports of products overseas 
      3. allow a greater number of entrepreneurs to import more expensive materials resulting in a change of production and diversification in the economy; 
  4. Invites nations and other 3rd parties to invest in the education of younger individuals to increase their entrepreneurial abilities to further inspire startups and the aid of small enterprises whilst having the knowledge of available financial institutions by:
    1. calling upon HICs to increase transparency and access to business models within the private and public sectors thus increasing guidelines and knowledge in LICs in order to:
      1. provide businesses with information on how to access financial services 
      2. provide governments with the knowledge of what financial services are required in a healthy, stable economy
      3. further, provide governments with experience and methods in order to attract financial services and institutions such as investment opportunities in order to attract foreign banks 
    2. allowing for trips to more developed countries to increase their international awareness and their communication skills through exchange programs funded by NGOs
    3. equipping them, if possible, with resources to learn using more practical formats through internships and apprenticeships from parties such as: 
      1. universities
      2. independent entrepreneurs 
    4. educating students on personal finance procedures and terms thus giving them an incentive to begin working towards entrepreneurship through their enhanced education;
  5. Calls for nations to set up individual credit guarantee systems for banks and other lenders to justify the risk taken by low-interest loans to unassessed borrowers (no credit valuation) by:
    1. following and adapting successful examples of the schemes in other countries such as schemes where:
      1. the first portion of the loss is covered by the lender/banks
      2. the next portion is split equally between the bank and the fund (entity) 
      3. the remaining quantity is covered entirely by the fund 
      4. in return for the service of guarantee with the government, the banks will be required to cooperate with small-scale businesses and act to the best of their ability which will be regulated by the government 
      5. banks have the right to diversify risk by rejecting particularly risky loans from lenders who have questionable credit history, personal/short term loans and low revenues with little chance of growth
    2. covering the government’s stake by using the national crisis management protocol stated in clause 2 or from government revenue from the likes of:
      1. taxation 
      2. import tariffs  
      3. trade deals 
      4. bond issues 
      5. borrowing from entities such as the World Bank;
  6. Endorses the use of modern technology (if possible) for the advertising and marketing of nations in order to attract foreign financial services such as insurance firms, by utilizing means such as:
    1. Inter-support and collaboration between the different SSEs as it appears that a large number of SSEs lack technological advancements and facilities, while some SSEs offer technological consultancy and contracting services therefore SSEs can help other SSEs in what they are lacking, further financing each other’s development
    2. The promotion of SSEs on digital platforms and semi-annual conventions on/during which SSEs inform future investors about their objective and their capital and funding needs, one possible platform being Zoho One, already being implemented in countries such as the U.A.E., on which developers and entrepreneurs can grow their business with one system of integrated softwares for sale, marketing, support, accounting, operations and HR;
  7. Further recommends the use and integration of mobile banking services across the globe by following successful trials such as Paypal, Worldpay or M-Pesa (originally in Kenya) that have disrupted entire financial service industries by providing low-interest transactions between various entities rapidly, nations should encourage the internal development and growth of mobile banking by:
    1. Increasing telecommunications and digitalisation within the economy through: 
      1. Integrating the necessary marketing channels for such an undertaking
      2. Utilising a minimal yet sufficient percentage of the relief funds mentioned in clause 2
      3. Optimising of used and refurbished technical and digital assets between developed and under-developed nations, through a business deal with successful technological companies
    2. Gaining public opinion and support by marketing these services with their four key advantages: 
      1. A fast and convenient money-transfer system, available throughout the country and accessible to everyone with a mobile phone
      2. A secure and trusted service, removing the need to carry cash and the consequent risk of theft or loss
      3. Time savings for users by removing the need to travel to banks and wait in queues
      4. Cheap rates that reduce costs of financial products, e.g. lower rates on microloans; 
  8. Recommends the implementation of ‘Rebuild on a small scale, rebuild the country’ programs in Member Nations to be enacted to provide adequate financial services to SSEs in the following manner: 
    1. Private banks to compulsorily (under the emergency charter of countries) enact laws for SSEs specifically to:  
      1. Have facilities for an individual to register an SSE, in accordance with the definition established above 
      2. Reduce affordable credit and loan requirements (example reduce the need for existing capital, flexible deadlines, and low-cost monthly installment plans for paying back interest) for registered SSEs, enforceable by Law  
      3. Allow, in this registration for SSEs, to file all its loan requirements (different for different banks) in one manner, with the necessary documentation required 
    2. Make private banks conduct similar risk of investment factors, tenure of loans, and amount of loans in accordance with specific government intervention in this field, in the following manner: 
      1. Reviewing the skills, capacity, and commitment of the institution at all levels, and assessing organizational structure and incentives 
      2. Ensuring the business is ready for scale from an operative perspective, which includes sales analysis, marketing strategy 
      3. Ensuring the core infrastructure and enterprise architecture is in place to scale the business 
    3. Establishing client protection protocols (for bank and client) which require the following procedures to be part of the government framework: 
      1. Banks must help assess the risk on investment (as seen in sub-clause b)), primarily to educate the investee on the matter (more than official bank purposes) 
      2. Banks can not question the number of collateral clients wish to put up – furthermore, they can only provide approximate quotes on the collateral 
      3. Establishing Collateral Check Commissions (CCC) at the city administrative levels, comprising of volunteers who can take complaints from SSE owners in the case they feel misquoted on collaterals 
      4. Banks must provide a mandatory oral briefing of the paperwork SSE owners are being made to sign, and in the language of the clients choice 
    4. Private banks, on showing proper evidence of registered SSEs and their help can stand to be reimbursed by the national banks or reserved/federal banks of the countries.