394. Australia welcomes communication and we are pleased to co-sponsor. We also thanks Canada and the United States for their work in leading the development of this paper. As an innovative economy with a large number of MSMEs, Australia recognizes the important contribution small businesses make to driving growth and prosperity in the global economy. Communication notes that MSMEs tend to have large unmet financial needs, with 40% of MSMEs in developing countries having unmet needs of up to USD 5.2 trillion each year
395. In 2021, we discussed communication on IP for Investment, Financing and Funding, which explained that innovative businesses can find it difficult to use their IP assets to access funding because of issues around awareness and valuation of intangible assets. This has been exacerbated by the ongoing challenges posed by the COVID-19 pandemic, which continue to have a significant impact on small businesses. With these challenges in mind, we should all continue to explore the potential for alternative financing options, including microfinance, to fill this gap and enable MSMEs to access the financing they need to develop their ideas and participate in the global economy.
396. Document also highlights that while microfinance offers an alternative avenue to conventional financing, MSMEs still face the same – and in some cases additional – challenges in accessing credit. Noting in particular that microfinance's use of pooled lending and shared liability may lead borrowing groups to exclude MSMEs and, in some cases, may even lead to innovation and IP MSMEs to self-select out of participating in group loans.
397. Australia's Government IP agency – IP Australia – works to help MSMEs understand how they can use the IP system to accessing financing and to raise awareness of key considerations and challenges in the process. Including through an online portal which provides a single consolidated location for information on products, programmes, and services available to help SMEs commercialise their ideas. We look forward to further exchanges with Members, including informally, on how to best support innovative and IP-based micro, small and medium enterprises to access financing. We would also be pleased to discuss IP Australia's online portal in further detail.