Why SME development needs a shared maturity standard.
The global MSME finance gap is $5.2 trillion. Forty years of programmes have not closed it. One of the binding constraints is the one nobody talks about: every country, every programme, every funder uses a different SME maturity framework - and cohort-level outcomes therefore cannot be compared.
A multilateral DFI funds an SME-readiness programme in country A through a national SME agency that uses a five-stage maturity model. Six months later, the same DFI funds a similar programme in country B through an accelerator that uses a four-tier "growth ladder" with different stage definitions, a different lever set, and a different evidence threshold. At year-end, the DFI portfolio team is asked to report cohort outcomes across both countries to its board.
They cannot, comparably. The portfolio team commissions a synthesis. The synthesis takes four months, costs more than either programme's evaluation budget, and produces a heavily caveated report. This is not a special case. It is the operating reality of multi-country SME-development reporting across the DFI community.
The numbers, before the argument
The IFC's MSME Finance Gap analysis estimates the global financing shortfall at roughly $5.2 trillion across formal MSMEs in emerging markets. The World Bank's SME Finance Forum data places SMEs at approximately 90% of businesses worldwide and over half of formal employment. The ILO's informal-economy estimates push that share substantially higher in developing economies once unregistered enterprises are included.
These numbers are widely cited and serve as the headline diagnosis for the SME-development sector. The recommendations that flow from them, however, vary considerably across the major institutions - IFC, World Bank, OECD, UNCTAD, AfDB, IDB, EBRD - because each institution measures SME outcomes against its own indicator set. The OECD's Financing SMEs and Entrepreneurs Scoreboard tracks one set of credit and policy indicators across roughly fifty countries. The World Bank Enterprise Surveys collect a different set. The IFC tracks portfolio outcomes against internal definitions. None of these instruments produce cohort-level operator data that can be cross-tabulated against the others.
The cost of every institution rebuilding the same wheel
Brazil's SEBRAE has operated for over fifty years and is the largest single SME-support institution in Latin America. India's MUDRA has disbursed loans to tens of millions of micro and small enterprises. South Africa's Small Enterprise Finance Agency and Small Enterprise Development Agency (SEFA, SEDA) coordinate national SME finance and development. Singapore's Enterprise Singapore runs one of the most data-rich small-state SME systems. Mexico's former INADEM, Rwanda's Business Development Fund, Nigeria's Bank of Industry - each operates against country-specific definitions of SME readiness.
Each institution's framework is internally coherent. Few are externally compatible. The result is that the published meta-analyses on SME-development effectiveness - including J-PAL's review of business-training programmes, the World Bank's evaluations of entrepreneurship interventions, and DFI portfolio reviews from the CDC Group and IFC - converge on a common methodological caveat: cross-cohort comparability is the binding constraint on what can be concluded about what works.
J-PAL's reviews of business-training programmes in particular have found that the average measurable effect on revenue, employment, and survival is small or null across multiple randomised evaluations. That finding is not new and not controversial inside the development-economics literature. What is striking is that the finding has not produced a clear next instrument. Every programme that has been measured was measured against a different operator-level rubric. The aggregate finding tells us something is wrong; the aggregate data cannot tell us specifically what.
An SME with verified monthly financial cadence in Lagos is fundamentally the same operating reality as an SME with verified monthly financial cadence in Hanoi. The framework should reflect that. The evidence schema can vary.
What standardisation actually enables
A standardised SME maturity framework does not eliminate local context. It does enable five things the current landscape blocks.
- 01Cohort comparability across countries: the same tier transition means the same thing in São Paulo and in Lusaka. A J-PAL-style meta-analysis can draw cross-country conclusions about which interventions move which levers, instead of converging on the methodological caveat that has dominated the literature for fifteen years.
- 02Portfolio learning across DFIs: which interventions are improving outcomes across the global development corpus. The IFC, EBRD, IDB, AfDB and AIIB each maintain internal portfolio analytics. None of them currently produce cross-DFI operator-level comparability. A shared framework makes that possible without forcing institutional convergence on every metric.
- 03Donor accountability at scale: a multilateral country office can report against the same framework as a development-bank-supported programme, allowing the donor to compare an SME programme against an agriculture programme against a supplier-development programme without three separate evaluation methodologies.
- 04Lender pipeline efficiency: a credit officer at any institutional lender - be it Standard Bank, ICICI, Banco Santander, or a country-level development bank - reads the operator profile against one framework rather than the bespoke claim language of every applicant. Information asymmetry is the OECD's consistent diagnosis for the SME finance gap; a shared maturity framework is the operational layer that closes it.
- 05Intervention efficacy at the programme level: which specific interventions actually move tier, lever, and evidence - measurable across the global deployment of the framework. This is the question every funder has been asking for two decades without an operational way to answer it.
The localisation question, answered properly
The standard objection to standardisation is that SME development is irreducibly local. Tax compliance in South Africa (SARS clearance, B-BBEE certification, CIPC registration) does not mean what it means in Mexico (RFC registration, IMSS compliance). The customer-discovery curriculum useful for a rural Kenyan agri-cooperative is not the curriculum useful for a Nairobi software business. Standardisation feels, on the surface, like an erasure of context.
It is not, if the framework layer and the evidence layer are kept separate. The framework defines the universal: what financial discipline is, what commercial proof requires, what governance maturity means at a given stage. The evidence layer maps those universals to local proof. The framework is global; the schema is local. The institutional standards in adjacent disciplines have all converged on this architecture.
IFRS, since its 2001 establishment, has been adopted in over 140 jurisdictions for public-company reporting. The local tax authority still defines which document proves a revenue line; IFRS defines what revenue is. ICD-10, used by all 194 WHO member states for two decades before its 2022 transition to ICD-11, defines what a diagnosis category is; the local clinic defines which specialist signs off. Basel III sets capital adequacy ratios; each national supervisor applies them through its own framework. None of these standards eliminated local practice. Each of them enabled cross-jurisdiction comparability that was previously impossible.
What it would take to get there for SMEs
An SME maturity standard fit for institutional procurement requires three things.
- 01A published methodology, versioned in public, with changelogs and a deprecation process for outgoing definitions. The framework cannot evolve in private if institutions are to cite it in board reports.
- 02A governance body that maintains the methodology against operational feedback from deployments, with public consultation periods for substantive changes. The governance model used by the IFRS Foundation (the IASB), by the WHO classification reference groups, and by the OWASP Foundation in software security all apply here.
- 03A customisation specification that allows programmes, funders, and countries to extend the standard without breaking it. This is the architectural question that distinguishes a working standard from a top-down imposition. IFRS extensions, ICD-10 country variants, and OWASP profiles all solve this problem in their respective domains.
None of these requirements is unusual. They are the same requirements that produced IFRS in 2001, that maintained ICD-10 through three decades of clinical use, and that govern Basel as it evolves through periodic revisions. The SME-development sector has had every input necessary to build this layer for at least twenty years. The reason it has not been built is not technical. It is that no institutional incumbent had both the operational reach to test the framework against real deployments and the willingness to publish the methodology in the open.
Where this leads
A standardised SME growth framework is not a top-down imposition by a single vendor. It is not a fixed model that ignores forty years of operational practice in country agencies and DFIs. It is not a substitute for the human judgement of programme officers, mentors, credit committees, and policy teams.
It is the missing instrumentation layer that allows the work those teams already do to be compared, learned from, and reported on in language the institutional system recognises. The cost of not having one is the cost the sector already pays: bespoke reporting that does not survive donor audit, portfolio analytics that cannot answer the questions that matter, and the persistent observation, in published reviews, that the average SME-development programme has small to null measurable effect - without the operational ability to distinguish which interventions are the exceptions.
The instrument layer that makes that distinction possible is what the Mothusi Growth Score is being built to provide. The published methodology, the open governance, and the customisation specification are visible to anyone who wants to review them.
- [1]IFC (2017, updated 2022). MSME Finance Gap: Assessment of the Shortfalls and Opportunities in Financing MSMEs in Emerging Markets.
- [2]World Bank Group. Small and Medium Enterprises (SMEs) Finance - Topic overview.
- [3]OECD (2024). Financing SMEs and Entrepreneurs: An OECD Scoreboard.
- [4]World Bank Enterprise Surveys - global SME data programme.
- [5]ILO. Statistics on the informal economy - global estimates.
- [6]J-PAL. Improving small firms' growth and impact: review of business-training and entrepreneurship interventions.
- [7]IFRS Foundation. IFRS Standards adoption by jurisdiction (over 140 jurisdictions).
- [8]WHO. International Classification of Diseases - ICD-10 and ICD-11 documentation.
- [9]Bank for International Settlements (BIS). Basel III: A global regulatory framework for more resilient banks and banking systems.