The Missing Middle: Developing countries have a large number of informal, low-growth microenterprises and some large firms, but relatively few SMEs.
In developed economies, formal SMEs account for around 57% of total employment, but only account for 18% of employment in low income countries . This gap is called the "missing middle."
Research shows that these firms have high returns to capital , yet the main providers of capital, commercial banks, microfinance institutions, and private investors, face a key barrier in taking advantage of this opportunity: how to identify high-potential, low-risk entrepreneurs in a low transaction cost way and with little available information. Training programs, business incubators, and other support services face similar challenges in targeting their services.
 Ayyagari Beck & Demirguc-Kunt 2003
 Banerjee & Duflo 2004, McKenzie & Woodruff 2008