Even though the SME sector of businesses is the largest in the world, a very large portion of this sector does not have the collateral that most traditional lenders will require for a collateral-based loan. And, these businesses will not normally have a high enough return rate for venture capitalists to take advantage of. Also, a vast majority of these businesses won't have the credit and other information that other lenders will use to base their funding decisions on. This problem has led to a major gap in SME financing and is widening further in economies that are still developing all over the world.
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