The SME Financing Gap: Theory and Evidence Many commentators have postulated a “financing gap” for small and mediumsized enterprises (SMEs) meaning that there are significant numbers of SMEs that could use funds productively if they were available but cannot obtain finance from the formal financial system. This article summarises an OECD report (OECD 2006) on this topic which seeks to determine how prevalent such a gap may be – both in OECD countries and non member economies – and recommends measures to foster an improved flow of financing to SMEs.