In recent years, there has been a renewed appreciation for the critical role SME-focused development banks play in the economies of many countries. Besides supplying much-needed capital to businesses during times of crisis and recession, development banks are increasingly supporting essential change. This paper looks at five societal missions supported by SME-focused development banks: fostering social and economic inclusion; scaling up businesses to be more competitive; helping them adopt digital technologies; providing green financing in the transition to a low-carbon economy; and financing the creation and growth of innovative young companies.

This paper examines these roles with a focus on the members of The Montreal Group, a global forum of development banks focused on micro, small and medium-sized enterprises (MSMEs). It describes the evolving nature of development bank activities and concludes that, when properly governed and managed, they can be an irreplaceable force for social progress and prosperity around the world.