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  "documentTitle": "Creating the best SME Debt finance ecosystem",
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  "notes": "The slide uses academic citations to support the economic theory that SMEs are capital-constrained despite high potential returns.",
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      "text": "Additional debt could help with increasing access to capital for capital-constrained Dutch SMEs and may unlock further growth.",
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      "text": "There is some indication that Dutch SMEs have been experiencing higher return on assets than SMEs in peer jurisdictions. Company statistics suggest Dutch SMEs have higher returns on assets than peers: 8% vs. 5% in 2022. At the same time, balance sheet overall structure has remained in line with peer jurisdictions (with equity-to-asset ratio at 47-46% in 2022). Higher return on assets creates incentives for additional capital. Higher return on assets signifies that investments and business operations are generating more profits relative to the amount of capital invested. Economic theory suggests that potential constraints on access to capital are consistent with higher than average rates of returns on capital. One of the primary challenges faced by SMEs is limited access to capital, particularly when compared to larger businesses. SMEs often struggle to secure financing from traditional sources such as banks due to perceived higher risks associated with smaller businesses, limited collateral, and lack of established credit history. Additional debt could help with increasing access to capital for capital-constrained Dutch SMEs and may unlock further growth. Taking on debt would allow SMEs to access capital without diluting ownership or giving up equity, which can be particularly beneficial for small business owners who want to retain control over their ventures – though this evidence is also compatible with an equity financing gap.",
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      "text": "Firms with productive investment opportunities underinvest. Lack of access to finance is a frequent complaint of microenterprises (...) the estimated return to capital (...) was three to five times higher than market interest rate.",
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      "text": "Small firms face larger growth constraints and have less access to formal sources of external finance",
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      "text": "We find the average real return to capital in these enterprises is (...) substantially higher than market interest rates",
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      "text": "We find the average real return to capital in these enterprises is (...) substantially higher than market interest rates - De Mel, McKenzie, & Woodruff, The Quarterly Journal of Economics",
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      "text": "1. CPB, 2018; 2. Orbis Data, 2022; 3. Rajan and Zingales, 2001; 4. de Mel, McKenzie, Woodruff, 2008;",
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      "text": "SME POTENTIAL: INCREASING ACCESS TO DEBT FOR SMES MAY BE A VIABLE STRATEGY TO STIMULATE GROWTH, FOSTER INNOVATION, AND HELP ACHIEVE FULL POTENTIAL",
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