Small & Informal Business in a Green Economy

This policy brief by the Green Economy Coalition argues that small and medium enterprises (SMEs), including informal businesses, are essential for a fair and inclusive green economic transition. It highlights the significant economic contribution of SMEs in emerging economies and outlines eleven specific areas where policy support is lacking, ranging from financing gaps and legal recognition to the need for better visibility in national policy development.

• SMEs, particularly in emerging economies, are major drivers of employment and national income. According to World Bank data, formal SMEs in these regions can contribute up to 60% of total employment and up to 40% of GDP.
• Despite their potential, SMEs face significant systemic barriers in developing and emerging economies. These include limited access to technology, financing, and business management skills, as well as an ecosystem that often obstructs development, especially for those pioneering new social and environmental business models.
• There is a critical 'missing middle' financing gap for early-stage SMEs in emerging markets. The World Bank estimates that approximately 70% of micro, small, and medium-sized enterprises in these markets lack access to credit, as they often lack private or family capital and are too large for household microcredit but too small for traditional financing.
• The document identifies several policy needs to empower SMEs, including the creation of simple legal forms for social enterprises to improve tax and procurement environments, the support of informal self-organisation to allow microbusinesses to win group contracts, and the alignment of local policies with national and international frameworks like the SDGs.
• SMEs are often excluded from the high-level policy discussions that shape the green transition. The brief advocates for bridging the gap between national macro actions and micro implementation by inviting SMEs to participate in policy development through multi-stakeholder processes and consultations.

APA

Green Economy Coalition (n.d.). Small & Informal Business in a Green Economy. https://www.greeneconomycoalition.org/assets/reports/Cape-Town-Global-Meet-2019/PAGE-GEC-SME-policy-brief_final.pdf

Chicago

Green Economy Coalition. Small & Informal Business in a Green Economy. n.d. https://www.greeneconomycoalition.org/assets/reports/Cape-Town-Global-Meet-2019/PAGE-GEC-SME-policy-brief_final.pdf.

Wikipedia

{{cite report |author=Green Economy Coalition |title=Small & Informal Business in a Green Economy |url=https://www.greeneconomycoalition.org/assets/reports/Cape-Town-Global-Meet-2019/PAGE-GEC-SME-policy-brief_final.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{greeneconomycoalitionndsmall, author = {{Green Economy Coalition}}, title = {{Small \& Informal Business in a Green Economy}}, institution = {Green Economy Coalition}, url = {https://www.greeneconomycoalition.org/assets/reports/Cape-Town-Global-Meet-2019/PAGE-GEC-SME-policy-brief_final.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }