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SME Financing Data Initiative

International Context

Industry Canada examined the work undertaken in the United States and the United Kingdom in the area of SME financing data collection, analysis and reporting, to determine if their experiences could provide any best practices to help guide the development of the new Canadian initiative.

Both the US and UK approaches have strengths that the partners of this initiative have drawn upon in the development of the preliminary research agenda. The US National Survey of Small Business Finances conducts a demand-side survey every five years and reports its findings to Congress. The SME Financing Data Initiative used this survey as a source for some of its data elements (for example, questions related to trade credit and business characteristics.) However, it was noted that the survey, which has a sample of three to four thousand firms, is often not – or only partially – completed, due to its length and complexity. As for the supply side, while there is some reporting of SME financing, it only covers a subset of suppliers and financing instruments.

In the UK, the Bank of England amalgamates SME financing data collected by independent organizations, draws conclusions from these various sources, and publishes an annual report on findings. This report is quite comprehensive, as it gathers information from different sources, but the challenge remains in the ability to analyze this information comparatively given the differences in methodology of the numerous sources. However, the scope of coverage of data was noted for this initiative.

To summarize, the US and the UK have recognized the need to monitor SME financing on a regular basis. While neither country has a truly comprehensive approach in place, their experience points to the importance of reviewing SME financing issues from the perspective of financing suppliers and SMEs themselves in as thorough a way as possible.

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