TTHE 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, Iosco said the note was prepared for the G20 finance ministers and central bank governors.
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 the financing of SMEs and infrastructure projects.
“The market-based financing solutions described in the note cover many jurisdictions across a wide geographical region,” said Iosco.
It 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 predominantly bank-funded model for LTF towards a model that includes a greater share of capital market-based funding.
In recognition of the increasing role that capital markets play in the provision of LTF for SMEs and infrastructure, Iosco established the Long-Term Financing Task Force in November last year to review the issues and challenges facing LTF and opportunities for growth.
Securities Commission Malaysia chairman Datuk Ranjit Ajit Singh said given the scale of long-term financing needed globally, a sound market conduit that can effectively channel funds for economic growth and productivity is of paramount importance. Bernama