Accounting for financial inclusion

UNCTAD has a long-standing commitment to promoting accounting standards that are both aligned with good practice, and mindful of the specific challenges of MSMEs in developing countries.  About a decade ago, UNCTAD developed its guiding documents on accounting for MSMEs (SMEGA Level 2 and SMEGA Level 3), with a view to supporting the financial inclusion and access of MSMEs to finance. UNCTAD recently developed two accounting manuals: Accounting Manual for SMEs and Accounting Manual for Microenterprises. They are supporting tools to develop national action plans for strengthening the MSME sector and facilitate its formalization, and enhance the technical expertise of small company owners in access to finance. These manuals explain how to prepare basic financial statements, including for the purposes of credit applications.

Enabling accounting policies for MSMEs are part of the overall accounting and reporting infrastructure. In this regard, issues of accounting for MSMEs are also addressed within the framework of UNCTAD’s Accounting Development Tool (ADT), a benchmarking tool that helps national stakeholders assess their country’s corporate reporting infrastructure against international good practice, in order to identify gaps and priorities for further improvement. Thus, the ADT can help national stakeholders benchmark the specific requirements for MSME accounting infrastructure against international best practices, and establish action plans that associate infrastructure improvements and enhanced access to finance by MSMEs.

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