For half a century, exports, international capital flows, and foreign direct investment have been growing much faster than GDP, binding economies ever more tightly together. In many ways, this process has been a tremendous force for good. My own country, India, is testament to that. Integration with the world contributed to growth, lifting hundreds of millions of people out of poverty.
On the demand side, these issues can be tackled through a more systematic documentation and disclosure of information by SMEs and better business planning. On the supply side, bankers’ reluctance to lend to SMEs can be addressed through innovative credit assessment tools and techniques like credit scoring and better capacity building efforts for the financial service providers.