IOSCO issues report on long-term financing for SMEs, infrastructure
Published on: Friday, October 03, 2014
KUALA LUMPUR: The International Organisation of Securities Commissions (IOSCO) has published a research note on Market-Based Long-Term Financing (LTF) Solutions for small and medium enterprises (SMEs) and Infrastructure.It said the note is a compilation of recent examples of capital market solutions in developed and emerging markets that have contributed to the financing of SMEs and infrastructure projects.In a statement, the IOSCO said the note was prepared for the G20 Finance Ministers and Central Bank Governors.
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It describes innovative structures and products in equity capital markets, debt capital markets, securitisation and pooled investment vehicles that provide practical solutions to broadly recognised challenges for financing of SMEs and infrastructure projects. "It also provides key takeaways from each example and identifies themes common to the innovations."The market-based financing solutions described in the note cover many jurisdictions across a wide geographical region, while several case studies reference cross-border activities and/or have regional reach," said the IOSCO.Since the 2008 global financial crisis, the banking sector which has traditionally been a major source of funding for LTF needs, has undergone a significant deleveraging process and hence, increased the gap between supply and demand for LTF in many economies around the world. The IOSCO said as governments implement austerity measures and face budget constraints, public funding for SMEs and infrastructure projects had been constrained.Against this backdrop, it said, there has been a gradual shift from a pre-dominantly bank-funded model for LTF towards a model that includes a greater share of capital market-based funding.
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In recognition of the increasing role that capital markets play in the provision of LTF for SMEs and infrastructure, the IOSCO established the Long-Term Financing Task Force in November last year, to review the issues and challenges facing LTF and opportunities for growth.Stay up-to-date by following Daily Express’s Telegram channel.
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He is also Co-Chair of the LTF Task Force, Vice-Chair of the IOSCO Board and Chair of the Growth and Emerging Markets Committee. The publication of the research note underscores IOSCO's commitment to facilitating pragmatic market-based financing solutions, Ranjit added. – Bernama
