Access to financing remains a significant challenge for small and medium-sized enterprises (SMEs) in Africa, hindering their growth and job creation potential. Numerous intermediated lending programs have been implemented to encourage banks to increase their credit to SMEs. However, evaluations of the impact of these intermediated lending programs are limited. Our study, which focuses on support offered by development finance institutions, reveals an unexpected finding: supported commercial banks experienced an 8% reduction in loan growth. This finding is attributed to a reallocation effect within these banks.
