How small businesses can navigate global trade in an era of polycrisis

Micro, small, and medium-sized enterprises (MSMEs) account for 95% of all businesses and 60% of global employment, forming the backbone of the global economy. Yet they face persistent barriers to fully benefiting from international trade, including limited access to finance, complex regulations and poor digital infrastructure.

These challenges are exacerbated by the current polycrisis of economic shocks, supply chain disruptions, climate change and geopolitical uncertainty.

Overcoming these barriers require stronger international coordination. Since its launch at the WTO's 11^th Ministerial Conference in 2017, the WTO Informal Working Group on MSMEs (MSME Group) has advanced transparency, access to trade information and regulatory reforms to facilitate MSME participation in global trade.

Similarly, other international organizations have also supported MSMEs in developing economies and the least developed countries (LDCs) through targeted technical assistance, improved access to finance and strengthened trade-related capacities. However, given the ongoing polycrisis, greater efforts are needed to ensure that MSMEs – especially those in the least developed countries (LDCs) – are not left behind.

MSMEs often lack the resources and expertise to navigate complex international trade rules. The MSME Group has improved access to trade information through the Trade4MSMEs and the Global Trade Helpdesk platforms, which offer guidance on procedures and business intelligence. The new WTO Tariff & Trade database also gives MSMEs detailed access to tariff and import data, including recent tariff actions by WTO Members. Still, many businesses, particularly in the LDCs, encounter barriers due to inconsistent regulations and costly trade facilitation.

On the practical side, the International Trade Centre (ITC) has demonstrated results in facilitating MSME trade integration. In 2023 alone, ITC supported the participation of over 5,000 MSMEs in trade and market intelligence training, and over 2,400 enterprises improved their competitiveness. Nearly 70% of these MSMEs reported positive business outcomes, including access to new markets and buyers.

Access to finance is the biggest hurdle MSMEs face in pursuit of their global integration. The MSME Group has facilitated exchanges of best practices to improve cross-border payment solutions and financing mechanisms tailored to smaller businesses. At the 13^th WTO Ministerial Conference, it partnered with the WTO Informal Working Group on Trade and Gender to publish a compendium on financial inclusion initiatives for women entrepreneurs, addressing their specific barriers.

The International Finance Corporation (IFC), which is included in the compendium, has done a remarkable job of scaling MSME financing globally. In 2023, IFC financial clients disbursed $64.4 million in loans to MSMEs, bringing the total MSME loan size to $353.2 billion, with a pivot on women-owned enterprises, which received almost 10% of the total portfolio.

The Enhanced Integrated Framework (EIF) is bridging the financing gap through targeted support. In Uganda, the government has mainstreamed an EIF pilot project into its national budget. The EIF-supported District Commercial Services Project has improved MSMEs' access to commercial services and trade-related financial information, leading to more than a 100% increase in the median wage bill, driven by both higher wages and increased employment.

Digital trade presents major opportunities for MSMEs, especially in the LDCs, but the digital divide remains a major challenge. The MSME Group is addressing this issue by focusing on cyber-readiness, e-document recognition and paperless trade. The updated Trade4MSMEs platform now offers more country-level data and over 600 resources to support MSMEs in gaining access to digital trade.

EIF-backed initiatives in the LDCs are helping MSMEs access export markets. In Senegal, over 1,600 MSMEs – 40% of them women-led – joined a national e-commerce platform. The Cambodia Trade portal has created over 300 jobs in Cambodia, while South Sudan launched its first e-commerce hub to boost MSME participation in digital trade.

MSMEs face challenges in integrating into global value chains due to high compliance costs – especially regarding standards and regulations – and general market access barriers. The MSME Group’s focus on special provisions for MSMEs in Authorized Economic Operator programmes is a positive step, offering benefits to smaller firms. However, targeted capacity-building remains essential.

To amplify MSME voices, the MSME Group has hosted MSME Spotlight Sessions. In the latest, Fairafric – a Ghanaian-German chocolate company – shared how it tackles supply chain issues through full local production in Ghana and innovative trade finance solutions. Past sessions have featured MSMEs from Barbados, Nigeria, the UK and more.

Promising examples also emerge from LDC agriculture and manufacturing sectors. In Togo, EIF support helped boost soybean exports from $700,000 in 2015 to $60 million in 2023 and attracted over $250 million in foreign investment for an export-oriented processing industry sourcing from MSMEs and smallholders.

In Lao PDR, the social enterprise Ock Pop Tok (which means "East meets West"), with EIF support, partnered with over 100 rural women artisans to enhance traditional handicrafts for international markets. In Djibouti, formalization efforts enabled 2,000 MSMEs to access finance and trade opportunities, opening paths to global markets. These examples highlight the impact of well-targeted support in enabling MSMEs to compete globally.

As the world grapples with polycrisis, MSMEs need more than just survival strategies – they need an enabling environment that fosters resilience and growth. The work of the MSME Group, combined with support mechanisms such as the EIF, ITC and IFC, has laid a strong foundation for MSME participation in global trade. Nonetheless, bridging the remaining gaps will require:

With these measures, MSMEs – particularly in developing economies and the LDCs – can become powerful engines of economic growth, job creation and sustainable trade. The question is no longer whether we should support MSMEs, but how quickly we can implement the scalable solutions they need.