Small and medium enterprises (SMEs) play a vital role in the economy of many countries in the world due to their importance in growth, job creation, innovation, international trade, and balanced regional development. At the same time, they face significant challenges. One of them is access to sustainable and affordable finance, a limitation that can curtail their ability to survive and grow. The consequences of such limitation became evident during the pandemic, when cashflows dried up and many SMEs could not survive without government support. The conditions for SMEs may also worsen as monetary policy tightens and interest rates go up.

In the past decade, the WFE has produced a series of reports studying the factors that drive the evolution of SME markets across the world, the strategies that exchanges have adopted to support them, and the different initiatives that policymakers can adopt to stimulate their growth. In line with this, the purpose of the present study is to update our knowledge of the status of SME markets and to incorporate the new insights arising from the evolution of these markets after the pandemic. The report includes the results of a survey distributed to WFE members that covered quantitative and qualitative aspects of their SME markets.

Key findings

  • To facilitate SME funding, 68% (49 out of 72) of stock exchanges among WFE members now offer specialised SME listing platforms or segments, featuring modified listing and regulatory requirements, reduced fees, relaxed profitability prerequisites, and smaller issuances. 
  • While public equity SME markets in the advanced economies remain the world's largest by market capitalisation (79%), the number of listed companies has made almost no progress in the last decade.
  • In contrast, in emerging and developing countries the number of listed companies has nearly doubled from 2012 to 2022. This increase is primarily driven by the developing countries in the East Asia and Pacific region, which accounts for 49% of global SME listings. Conversely, the number of listings in the North America and Latin America and Caribbean regions has been decreasing during the same period.
  • In emerging and developing countries, the market capitalisation of SME platforms has increased about thirteen-fold since 2012, reaching roughly USD 2.13 trillion in 2022. Comparing across regions, the East Asia and Pacific region also dominates in terms of market capitalisation, accounting for 90% of the total, surpassing USD 2.41 trillion by the end of 2022.

Survey results:

  • Of the different benefits that SME platforms offer to issuers, the most frequent are exemptions of minimum profitability requirement (57%), a less frequent reporting schedule (33%), no minimum free-float requirement (30%), and no historical financial statements requirement (7%).
  • Our analysis confirms that SME markets generally exhibit lower liquidity compared to main markets albeit with certain exceptions, making it challenging for SMEs to raise capital and attract investors.
  • There's a notable correlation in the return performance between SME markets and main markets, with this trend strengthening in the post-COVID era.

Volatility in SME markets has increased in the post-COVID period with policies such as stimulus packages amplifying market fluctuations, especially in SME markets dominated by retail investors.