By far the biggest share of investment comes from bank lending.

A new white paper released by Ernst & Young, analyses why entrepreneurs are so critical for a global economic recovery but continue to face challenges in accessing funding across the world.

Among the more than 1,000 entrepreneurs that were surveyed for the report across the G20, almost two-thirds say that they find access to finance difficult in their country. Despite intervention by a number of G20 governments, bank lending remains difficult to obtain, particularly in the early stages of SMEs growth.

The entrepreneurs also indicate that risk aversion among institutional and other investors has made it more difficult to obtain equity finance. Additionally, regulatory initiatives aimed at strengthening the financial system can exacerbate their challenges.

Access to funding continues to be one of the most significant challenges for the creation, growth and survival of SMEs, particularly innovative ones. Despite being key engines of economic growth; accounting for 50 per cent of employment in most G20 countries, SMEs attract just a tiny proportion of overall investment.

Overall investment in SMEs across the G20 stands at US$714b, 6 per cent of the total US$11,507b for all forms of investment. By far the biggest share of this comes from bank lending at US$569b. By individual countries, China dominates with investment in SMEs of just over US$400b, of which US$385b is bank lending. The US follows at around US$116b. Funding in many G20 countries is dominated by bank lending, although the US stands out as offering a more diverse range of debt and equity finance mechanisms.

Maria Pinelli, Global Vice-Chair for Strategic Growth Markets at Ernst & Young: "While SME’s create 50 per cent of employment in most G20 countries, they only receive 6 per cent of investment. Clearly, there is an imbalance here. How many more jobs could be created with more support? With just a few changes, by 2020 the financial system could support double the number of SMEs it does today.

"Entrepreneurship is also vital to the future of rapid-growth markets. Although many of these economies have enjoyed high rates of GDP growth for the past decade, their strong performance has often depended on low-cost exports, a commodity price boom and large scale investment in infrastructure.

"In the coming years, these markets must rebalance their economies towards greater domestic consumption, import demand and higher-value business activity. The creation of an environment in which entrepreneurship can flourish will be an important step in achieving these objectives."