Strengthening the role of the private sector and entrepreneurship in financing for development

This report outlines some of the key issues pertaining to the role of the private sector and entrepreneurship in financing for development. The report examines issues relating to the creation of an enabling environment for business and to the strengthening of entrepreneurship and private sector actions to facilitate development. It draws widely from the report of the Commission on the Private Sector and Development and from the agreed principles and recommendations of the Monterrey Consensus of the International Conference on Financing for Development.

The report is divided into three parts:

• the first part examines the key requirements for improving the overall business environment in developing countries and, in doing so, looks at progress and obstacles in those areas
• the second part is concerned with the underlying factors that help create healthy firms and strengthen entrepreneurship in the economy
• the third part of the report is concerned with the actions of the private sector to facilitate development, looking at multi-stakeholder partnerships, networks and business opportunities to provide goods and services to the poor

The report focuses on six broad conditions that are key to developing an effective financial environment:

• appropriate and enforceable regulations and laws
• labour and related standards
• availability of finance
information and
• an enabling domestic and international policy environment

It stresses that those conditions are critical for the operations of small and medium enterprises (SMEs), which are responsible for most employment and income-generation opportunities and can be identified as a major driver of poverty alleviation.