ALGIERS, Algeria, May 19. Development institutions can play a key role in establishing Islamic MSME finance funds, Officer in Charge Director General of the Islamic Solidarity Fund for Development (ISFD) Adil Alsharif said at the panel discussion titled “Digital Solutions for Empowering MSMEs and Fostering Socio-Economic Development” as part of the bank’s annual meeting in Algiers, Trend reports.
According to him, MSMEs represent the backbone of local economies. Because they generate employment, they generate innovation, new ideas
"However, MSMEs, they face challenges, and have five key areas: access to finance, capacity development, access to markets, policies and regulations, and technology, access to technology," he stressed.
Speking about the first challenge - access to finance, Alsharif noted that development institutions can help in three areas.
"One, they can support in establishing Islamic microfinance and
establishing Islamic small and medium funds for financing. Another
area is to help the MSMEs when they want to go for financing is to
de-risk the lending of financing, as an example, by establishing
guarantee funds. Also, the development institutions can help work
with governments in developing lending finance to attract private
investments.
In addition, according to him, development institutions can help
expand market access for SMEs.
"Because they have limited exposure to certain areas,
development institutions can help them go beyond their area into
regional and international. By linking them to international
organizations, big companies, and in terms of getting exposure,
they can help them, of course, with digital solutions like
e-commerce platforms.
He also pointed to the bureaucratic problems that SMEs face when
registering and licensing.
According to him, development institutions can work with government agencies to reduce administrative barriers.
"The last point is about digital solutions and technology. We live now in a very competitive world, and successful businesses they are relying a lot on technology in two areas. One, improving their efficiencies, minimizing the costs of everything, including people, and using technology to get exposure to the whole world. And MSMEs probably, and mostly, don't have that kind of capacity. And here, development institutions can support MSMEs to adopt digital solutions, like e-commerce applications, finance, and operations, and also prepare them to access affordable technology," Alsharif added.
Stay up-to-date with more news on Trend News Agency's WhatsApp channel