World’s Best SME Banks 2025: Global, Country and Territory Winners

Smaller businesses are looking to increase added value per employee. Global Finance announces the winners of the third annual “Best SME Banks in the World” competition.

When it comes to performance, bigger is better. Small and medium enterprises (SMEs) and micro, small and medium enterprises (MSMEs) face a significant gap in value added per employee compared to their larger counterparts.

Small business productivity is half that of larger firms, the authors of a 2024 McKinsey Global Institute (MGI) study found. In emerging markets, the average is 29%, or a gap of 71%. Kenya has the widest gap of the 16 emerging economies studied at 94%, while Brazil has the narrowest at 46%. In advanced economies, the average productivity gap is 40%, with Poland having a 50% gap and the UK 16%.

These differences in value added represent serious money left on the table, given that MSMEs represent 90% of the world’s businesses: roughly half of private sector value added and almost two-thirds of business employment. According to MGI, the actual productivity ratio relative to the top quartile level averages 5% and 10% of GDP in advanced and emerging economies, respectively.

“It ranges from 2% in Israel and the UK to 10% in Japan among advanced economies, and from 3% in Brazil to 15% in Indonesia and Kenya among emerging economies,” the authors report. “Per worker, this amount is significant: from approximately US$3,000 in Israel to US$12,900 in Japan among advanced economies, and from US$3,200 in Mexico to US$8,800 in Indonesia among emerging economies (all purchasing power parity).

Lack of access to finance accounts for much, but not all, of the performance gap. A World Bank study estimates that MSMEs face $5.2 trillion in unmet financing needs, 50% more than the current lending market for such businesses.

Narrowing the gap

When MSMEs seek help to improve productivity, they can turn to governments, business partners and financial institutions, each of which has unique offerings.

Governments can provide assistance with public finance programs and finance basic infrastructure development, but poor management and oversight often undermine their success.

“For decades, governments in emerging and developing countries have implemented programs to improve SMEs’ access to finance, often at large fiscal costs. However, the SME finance gap remains large, especially in least developed countries, and government budgets are constrained,” said Jean Pesme, global director of the World Bank’s Global Finance, Competitiveness and Innovation Practice, in a 2024 research report. It suggests governments take “a more informed approach to designing and implementing support to ensure it reaches SMEs facing the most significant financial constraints.”

On the other hand, the productivity gap can be partially closed by creating an economic structure in which larger and smaller companies work together, argues Olivia White, senior partner at McKinsey and director at MGI. “It actually improves the productivity of both smaller and larger firms,” she says.

The MGI study said DuPont is using banking relationships to provide working capital credit to its rural MSME suppliers, strengthening its supply chain and increasing sales.

But not all help has to be financial. The MGI report cites automotive MSMEs that have “gained operational expertise through systematic engagement with productive OEMs as well as smaller software developers (who) have benefited from the ecosystems of talent and capital created by larger companies.”

Financial institutions have historically been a double-edged sword for MSMEs, but that is changing. Banks finance MSMEs, but because the latter have less capital and security than larger players, they face tougher credit scoring models that slow down account opening and lending.

However, banks have adopted innovative underwriting approaches that incorporate additional alternative credit data to provide affordable loans. MSMEs have responded positively to these new proposals. An Experian survey found that 70% of small businesses are willing to provide such data if it means a better chance of getting a loan or lower borrowing rates. Banks are also exploring how they can act as bridges between their MSMEs and larger clients.

“Financial institutions often own the most important link between smaller and larger firms—payment routes,” says MGI’s White. “One of the main ways small and large firms interact is that one does something for the other, and there should be a payment for it. By supporting these rails, banks facilitate interaction between smaller and larger firms.”

However, she adds, these are early days for providing such services. More financial institutions are talking about becoming matchmakers, and many are experimenting with platform mechanisms that could facilitate connections between clients. But before these platforms can scale, much more development work needs to be done.

“I suspect it will largely depend on the market and who sees this business opportunity,” White says. — Robert Daly

Methodology

With input from industry analysts, corporate executives and technology experts, the magazine’s editors Global finance selected the winners of the “Best SME Banks in the World 2025” competition based on objective and subjective factors. The editors have reviewed the records provided by the banks, as well as the results of independent research. No entries were required.

The judges considered performances from April 1, 2023 to March 31, 2024. Global finance then applied a proprietary algorithm to whittle down the list of applicants to produce a numerical score of up to 100. The algorithm weighs a number of criteria of relative importance, including knowledge of SME markets and their needs, breadth of products and services, market position and innovation.

Once the judges narrowed the field, they applied final criteria including global, regional and local reach, staff size and experience, customer service, risk management, range of products and services, execution skills and use of technology. In case of a tie, judges give slightly more weight to local suppliers rather than global organizations. Experts also tend to favor private sector banks over government agencies. The winners are those banks and service providers that best meet the specialized needs of SMEs.

BTG Pactual Empresas retains its crown

Three times it has been the crowning glory of the Brazilian digital bank BTG Pactual, which received the “Best Bank for Small and Medium Enterprises” award in Brazil, Latin America and the world. Having opened for business in 2019, it continues to grow its SME loan portfolio, which grew 52% year-on-year to reach R$22.1 billion (approximately US$3.9 billion) in the first quarter of 2024. Nearly 40% of its loan portfolio—R$8.9 billion—was eligible for the bank’s sustainable financing program.

To support its agribusiness clients, BTG Pactual Empresas introduced a variety of credit offerings, including real estate financing, invoice discounting, direct energy negotiations, and lines of credit for clean energy and agribusiness supplies, equipment, and facilities. In addition, the company has partnered with Latin American enterprise resource planning systems provider Senior Sistemas to develop digital financial products and services for the latter’s systems.