Abstract
Policymakers in the MENAP region have sought to achieve inclusive growth by promoting development of small and medium-sized enterprises (SMEs), using government vehicles and other initiatives. But, while the programs helped increase the number of SMEs, barriers to growth persist, including limited access to finance, unfavorable business environment, talent gaps, and weak internal managerial capacities. These barriers are manifesting in a predominance of microenterprises that have lower employment generation capacity. Partial implementation of reforms explains some of the underperformance, but frictions in the design of the SME development strategy also played an important role. Sustaining current reforms is, therefore, not sufficient to achieve inclusive growth. Digital technologies can boost SMEs’ productivity and growth and economies are becoming more digital. Thus, for SMEs to be effective engines of inclusive growth, a rethinking of the SME development strategy is needed that makes SMEs digital transformation a priority.
The views expressed in this paper are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Accenture. 2016. Accenture Technology Vision 2016. Building a Digital Middle East.
Bricker, Annie. 2019. Filling the MENA IT Skills Gap. CIO July 1, 2019.
Deloitte. 2014. Technology, Media & Telecommunications predictions 2014 Middle East.
EY. 2015. How Will the GCC Close the Skills Gap? Ernst and Young.
Fabre, Cyrille, Malauzat Anne-Laure, Sarkis Charbel, Dhall Tanmay, and Ghorra Josette. 2019. E-Commerce in MENA. Opportunity Beyond Hype. Google and Bain and Company White Paper.
Galviz, Jaime. 2020. Mind the Gap: The Region’s Digital-Skills Shortage… and What to Do About It. https://wired.me/technology/microsoft-digital-jobs-middle-east/.
GSMA. 2019. The State of Mobile Internet Connectivity. 2019 GSM Association. https://www.gsma.com/mobilefordevelopment/.
IFC. 2017. MSME Finance Gap, SME Finance Forum, World Bank.
IMF. 2019. Fintech, The Experience so Far. Bali Fintech Agenda. International Monetary Fund.
Lukonga, Inutu. 2018. Fintech, Inclusive Growth and Cyber Risks. IMF Working Paper. WP/18/201.
Lukonga, Inutu. 2020. Harnessing Digital Technologies to Promote SMEs in the MENAP Region. IMF Working Paper WP/20/135.
Magnit. 2019. MENA Venture Investment Report.
McKinsey & Company. 2016. Digital Middle East: Transforming the Region into a Leading Digital Economy October 2016. Tarek Elmasry, Enrico Benni, Jigar Patel, Jan Peter aus dem Moore.
OECD. 2017. Entrepreneurship at a Glance. OECD Publishing, Paris.
OECD. 2019a. Vectors of Digital Transformation. www.oecd.org/going-digital.
OECD. 2019b. Harnessing Digital Technologies for Entrepreneurs and SMEs. http://www.oecd.org/mena/competitiveness/MENA-SME-idea-factory-flyer-technology.pdf.
PwC. 2017. Empowering the GCC Digital Workforce Building Adaptable Skills in the Digital Era. http://www.strategyand.pwc.com/me.
Saleem Q. 2017. Overcoming Constraints to SME Development in MENA Countries and Enhancing Access to Finance. World Bank, IFC.
Sharekh, Alanoud Al. 2018. SME Funds as a Vehicle of Economic Reform in Kuwait and the GCC. Center for the Middle East. Carnegie.
WAMDA. 2016. Access to Talent for MENA’s Entrepreneurs. WAMDA Research Lab in Collaboration with IFC. Beirut Digital District.
Wilson, Christopher and Morozova Anastasiia. 2019. A Supervisor’s Guide to Regulatory Sandboxes. MCM Policy Position Note.
World Bank. 2014. Broadband Networks in the Middle East and North Africa, Accelerating High-Speed Internet Access. Directions in Development. Communication and Information Technologies by Gelvanovska, Natalija, Rogy Michel, and Rossotto Carlo Maria.
World Bank. 2016. Digital Dividends. World Development Report. Background Paper on Exploring the Relationship Between Broadband and Economic Growth by Michael Minges. ictData.org.
World Bank. 2017. Islamic Banking Opportunities Across Small and Medium Enterprises in MENA. IFC.
World Bank. 2018. A New Economy for the Middle East and North Africa. MENA Economic Monitor.
World Bank. 2019. Doing Business 2019. World Bank Group. Washington, DC.
World Economic Forum (WEF). 2016. Executive Opinion Survey.
World Economic Forum (WEF). 2017. The Future of Jobs and Skills in the Middle East and North Africa. Preparing the Region for the Fourth Industrial Revolution.
World Economic Forum (WEF). 2019. Network Readiness Index.
World Trade Organization (WTO). 2019. Global Value Chain Development Report. Chapter 6. The Digital Economy, GVCs and SMEs by Emmanuelle Ganne and Kathyrn Lundquist.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2021 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Lukonga, I. (2021). Fintech and the Real Economy: Lessons from the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) Region. In: Pompella, M., Matousek, R. (eds) The Palgrave Handbook of FinTech and Blockchain. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-66433-6_8
Download citation
DOI: https://doi.org/10.1007/978-3-030-66433-6_8
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-66432-9
Online ISBN: 978-3-030-66433-6
eBook Packages: Business and ManagementBusiness and Management (R0)