CID’s Entrepreneurial Finance Lab wins G-20 SME Finance Challenge

Selected as one of the most innovative solutions in the world to unlock access to finance for SMEs in developing countries

At its annual meeting, the Group of 20 launched a competition to find the best models worldwide for public-private partnerships that catalyze finance for small and medium enterprises (SMEs). The Entrepreneurial Finance Lab (EFL) at the Center for International Development (CID) at Harvard University was selected as a winner of the challenge. The EFL is pioneering the use of psychometric screening tools of entrepreneurial ability and honesty to unlock large-scale bank finance for SMEs in developing countries.

EFLwas co-founded by Asim Ijaz Khwaja, HKS Professor of Public Policy, and Bailey Klinger, a fellow at Harvard’s Center for International Development. The EFL tool has been shown in pilot tests across Africa and Latin America to reduce default by 25% - 40%. By reducing the risks of lending to businesses too large for microfinance and too small for venture capital, EFL allows banks to scale up lending to SMEs in developing countries, a key driver of growth.

Media coverage:

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