A new conceptual framework for SME financing and green performance and support in EU27

Small and medium enterprises (SMEs) play a central role in driving economic development and innovation. Access to finance is central for their growth and sustainability, particularly as they navigate the multifaceted challenges posed by climate change. Small and medium enterprise access to finance is challenging to quantify accurately. Utilizing composite indicators offers a potential solution, albeit one requiring meticulous design and implementation. Through this paper, we show how to improve the robustness to methodological assumptions of the European Investment Fund Small and Medium Enterprise Access to Finance Index, enhancing its reliability and depth of analysis. A robust index is central for conveying a clear message and standing up to scrutiny, because its results remain stable regardless of the specific formula used to compute it. The second aim of the paper is to design a robust index for SME green performance and support. The index aims at measuring both the performance of SMEs in adopting sustainable and green practices and the support they receive from public policies to facilitate these efforts. The third aim of the paper is to propose a new conceptual framework linking SME access to finance and green performance and support. We aim at offering a holistic approach to understand the interplay between financial access and green business practices and enhance SME competitiveness, sustainability, and economic resilience in EU27.