No Small Business: A Segmented Approach to Better Finance for Micro and Small Enterprises

This Focus Note is based on primary research conducted with 383 MSEs in India, Kenya, and Peru – three diverse emerging markets with a vibrant MSE finance ecosystem that includes strong incumbent providers like microfinance institutions, cooperatives, and banks, as well as innovative new providers like fintechs. The research profiled MSEs based on demographic and firm characteristics, explored their attitudes toward and experiences of accessing finance, and probed their unmet financial and nonfinancial needs. The respondents primarily came from the transport, manufacturing, and retail sectors, representing a significant majority of firms in the MSE universe. The differentiated insights from the research are important for FSPs to better serve their MSE clients. They are also relevant to the financial inclusion community as it endeavors to rebuild the MSE ecosystem in an inclusive and resilient manner in the wake of the ongoing COVID- 19 pandemic.