OPM were asked by Danida to prepare a set of guiding principles to support promotion of financial services for small and medium enterprises (SMEs) in developing countries. The guidelines were prepared for Danida advisors but it is hoped that other development agencies and developing country government may also refer to these. This assignment was a desk-based study reviewing the relevant literature on SME financing, policies and guidelines, best-practice documents, toolkits, research articles and evaluation reports of development partners. In addition to the literature review, OPM conducted telephone interviews with key institutions and experts in SME finance. The study advises on key issues relevant for the promotion of SME financial services, with the main focus on micro-level issues. The study analysed issues relevant for various contexts with special focus on SME financing in Africa, where the majority of Danish development assistance is allocated.