Micro, small and medium-sized enterprises (MSMEs) play a central role in economic development, supporting employment, entrepreneurship and local business activity across developing economies. Yet many of these businesses face difficulties accessing affordable finance, connecting with larger markets and demonstrating their financial reliability to potential lenders and investors.

Discussions at the World Bank Group Meetings have highlighted an important question: how can better business data make smaller enterprises more visible, better connected and better prepared to obtain financing?

The issue goes beyond collecting statistics. Reliable information about small businesses can help financial institutions assess lending applications, governments design more effective support programmes and companies identify potential suppliers and commercial partners.

When businesses remain invisible in official records or lack documented financial histories, their economic contribution may be underestimated. Improving the availability and quality of business data could help address this gap and create new opportunities for sustainable growth.

MSMEs Form a Major Part of Developing Economies

Micro, small and medium-sized enterprises represent a substantial share of business activity in developing economies. According to the figures highlighted in the World Bank Group Meetings discussion, these enterprises account for approximately 90% of businesses and employ around 75% of workers in developing economies.

Their importance extends across retail, agriculture, manufacturing, transportation, construction, professional services and numerous other industries. They generate income for households, provide employment opportunities and supply goods and services to local communities.

Despite their economic contribution, smaller businesses often operate with limited administrative resources. Some rely heavily on cash transactions, maintain incomplete financial records or lack access to formal systems that document their operations.

These circumstances can make it difficult for external organisations to understand their performance and growth potential. Better data systems could help close the information gap between smaller enterprises and the institutions that provide capital, services and market opportunities.

Why Business Visibility Matters

A business cannot easily attract opportunities if potential partners cannot verify that it exists, understand what it does or assess whether it can reliably deliver products and services.

Business visibility involves making essential information available through appropriate, trustworthy records. Depending on the circumstances, this may include business registration details, ownership information, operating history, financial records, products, services and relevant certifications.

Reliable business directories and digital registries can help buyers discover suppliers that might otherwise remain outside established commercial networks. They can also make it easier for public institutions to identify eligible enterprises when developing business support initiatives.

Greater visibility may be particularly valuable for small businesses operating in rural areas or underserved communities. However, registration alone is not sufficient. Information must be accurate, accessible and regularly updated, while sensitive commercial and personal details require appropriate protection.

The goal is to help legitimate enterprises become easier to identify and evaluate without imposing administrative burdens that discourage smaller firms from participating in the formal economy.

Better Data Can Strengthen Access to Finance

Access to finance remains a challenge for many small enterprises, particularly those without extensive credit histories or conventional collateral.

Banks and other lenders need to assess whether a borrower is likely to repay a loan. When a business has limited financial documentation, lenders may struggle to distinguish a promising enterprise from one carrying significant financial risks.

Reliable business information can improve this assessment. Depending on the available data and applicable rules, lenders may examine documented sales, payment histories, cash flows, outstanding obligations and evidence of business activity.

Digital payment records and properly maintained accounting systems can provide additional information about a company’s financial behaviour. Alternative data may also help assess businesses that lack traditional credit histories, although such information must be relevant, reliable and used fairly.

Better information does not guarantee loan approval or automatically make credit cheaper. Lending decisions still depend on repayment capacity, loan terms, risk exposure and the wider economic environment.

Nevertheless, stronger records can reduce information gaps and potentially enable financial institutions to evaluate more applications with greater confidence.

Digital Tools Can Help Businesses Build Financial Records

Technology offers practical ways for small enterprises to improve the quality of their business information.

Digital bookkeeping applications can help owners record income, expenses, invoices and outstanding payments. Electronic invoicing and digital payment systems can make transactions easier to document, while inventory management tools can help businesses understand stock levels and operating costs.

When these records are accurate and consistently maintained, they can support financial planning and make it easier to prepare loan applications or respond to requests from potential commercial partners.

However, adopting digital tools may require initial investment, training and dependable internet access. Businesses with limited digital skills may need affordable solutions and practical guidance to benefit from these systems.

Data collection should also remain proportionate. Small enterprises should not be expected to purchase expensive software or disclose unnecessary information simply to demonstrate their legitimacy.

Connecting Small Enterprises With Wider Markets

Better data can support business growth beyond lending.

Large companies and public procurement agencies frequently need suppliers that meet particular requirements relating to capacity, quality, delivery schedules and compliance. Reliable business information can help them identify smaller enterprises that satisfy these needs.

Digital business platforms and verified supplier databases can also connect entrepreneurs with distributors, service providers and potential customers across different regions.

For smaller firms, these connections may create opportunities to expand beyond local markets, diversify their customer base and become part of larger supply chains.

Improved data can also help governments and development organisations understand which sectors contain large numbers of small enterprises, where financing gaps are concentrated and which groups face barriers to participation.

Such insights can support more targeted programmes, although their effectiveness depends on sound analysis, appropriate implementation and regular evaluation.

Building Trust Through Reliable Information

The usefulness of business data depends on its quality. Incomplete, outdated or inaccurate records can mislead lenders, buyers and policymakers rather than improve their decisions.

Governments, financial institutions and other organisations therefore need effective arrangements for verifying information, correcting errors and updating records.

Interoperability is another important consideration. When business registries, financial systems and digital platforms cannot exchange information securely, enterprises may be required to submit the same documents repeatedly.

Well-designed systems can reduce unnecessary duplication, provided that information sharing follows clear rules and respects privacy requirements.

Cybersecurity must also remain a priority. Business databases can contain sensitive financial, ownership and operational information, making unauthorised access or misuse a serious concern.

Small enterprises should understand what information is collected, who can access it and how it may be used. Strong safeguards can help build confidence in digital systems and encourage responsible participation.

What Governments and Financial Institutions Can Do

Improving the business data environment requires cooperation among public authorities, lenders, technology providers and entrepreneurs.

Governments can simplify business registration, improve the accuracy of official records and support accessible digital infrastructure. They can also establish clear data protection standards and encourage systems that allow authorised information to be exchanged securely.

Financial institutions can develop proportionate assessment methods that recognise reliable records from smaller enterprises rather than relying exclusively on traditional collateral or long credit histories.

Development organisations can support technical assistance, digital skills training and programmes that help entrepreneurs maintain accurate financial documentation.

Business owners also have an important role. Keeping consistent accounts, documenting transactions and updating registration details can strengthen their ability to demonstrate financial performance and engage with potential partners.

These measures should be designed to include informal and underserved enterprises rather than creating new barriers for businesses with limited resources.

Turning Better Data Into Economic Opportunities

The discussion at the World Bank Group Meetings points to a wider development challenge: small businesses need more than access to technology. They need systems that allow their economic contribution to be recognised and their potential to be assessed fairly.

Reliable data can help close information gaps, improve business discovery and support more informed lending decisions. It can also give policymakers a clearer understanding of the conditions facing entrepreneurs across different sectors and communities.

However, data alone cannot resolve every obstacle. Affordable financing, reliable infrastructure, business skills, predictable regulations and access to customers remain essential for enterprise development.

The greatest benefits are likely to emerge when trustworthy information is combined with practical financial services and policies that enable smaller firms to participate in the formal economy.

For developing economies, strengthening the information infrastructure surrounding MSMEs could help more enterprises demonstrate their capabilities, build commercial relationships and pursue sustainable growth.