How Firms Fund Their Day-to-Day Operations: Working Capital Finance Across 122 Economies
Introduction
When a business needs to buy inventory, pay suppliers before its own customers have paid, or cover payroll during a slow season, it needs working capital. The question is where that capital comes from. Across 122 economies tracked by the World Bank Enterprise Surveys, the share of firms that use bank loans to finance working capital ranges from 64.5% in Peru to just 2.1% in Iraq.
This article explains what the working capital finance indicator measures, how it compares to other business financing metrics, and which countries sit at each end of the spectrum. For a broader look at how firms finance their growth, see our report on how the world finances business and our explainer on how firms finance investment.
What “Firms Using Banks to Finance Working Capital” Measures
The World Bank Enterprise Surveys ask registered firms with five or more employees a simple question: what proportion of their working capital — the money used to fund day-to-day operations — comes from bank loans (including lines of credit)? The indicator IC.FRM.BKWC.ZS reports the share of firms that use any bank financing for working capital.
This is distinct from investment finance, which tracks bank loans used to purchase fixed assets like machinery, buildings, or land. A firm might use internal funds for working capital while borrowing for new equipment, or vice versa. The two metrics capture different financing behaviours. For details on investment finance, see our article on where firms rely on bank loans.
The Global Ranking
Here are the top 30 economies by share of firms using bank loans for working capital:
| Rank | Country | Firms Using Bank Loans for Working Capital | Year |
|---|---|---|---|
| 1 | Peru | 64.5% | 2023 |
| 2 | Kosovo | 61.9% | 2025 |
| 3 | Italy | 61.8% | 2024 |
| 4 | Belgium | 54.9% | 2024 |
| 5 | Israel | 54.1% | 2024 |
| 6 | El Salvador | 49.0% | 2023 |
| 7 | South Korea | 47.9% | 2024 |
| 8 | Mauritius | 47.7% | 2023 |
| 9 | Paraguay | 46.8% | 2023 |
| 10 | Uruguay | 46.1% | 2024 |
| 11 | Ecuador | 45.4% | 2024 |
| 12 | Mexico | 44.9% | 2023 |
| 13 | Spain | 44.5% | 2024 |
| 14 | Central African Republic | 43.5% | 2023 |
| 15 | Malta | 42.3% | 2024 |
| 16 | Slovakia | 41.7% | 2023 |
| 17 | Czechia | 41.4% | 2024 |
| 18 | Benin | 41.4% | 2024 |
| 19 | Kenya | 40.8% | 2025 |
| 20 | Mongolia | 39.8% | 2025 |
| 21 | Nepal | 39.6% | 2023 |
| 22 | Serbia | 39.6% | 2024 |
| 23 | Samoa | 38.9% | 2023 |
| 24 | Vietnam | 38.7% | 2023 |
| 25 | Bangladesh | 38.7% | 2022 |
| 26 | Armenia | 38.3% | 2024 |
| 27 | South Sudan | 37.7% | 2024 |
| 28 | Montenegro | 36.8% | 2023 |
| 29 | Togo | 36.5% | 2023 |
| 30 | Moldova | 35.7% | 2024 |
At the bottom of the rankings, the landscape is very different. Iraq records just 2.1%, Chad 2.6%, Pakistan 3.5%, Afghanistan 3.6%, and Angola 3.9%. In these economies, firms rely overwhelmingly on internal funds, retained earnings, or informal credit to manage daily operations.
Regional Patterns
Working capital finance varies significantly by region. Latin America leads, followed by Europe and South Asia:
| Region | Average % of Firms Using Bank Loans for Working Capital | Countries |
|---|---|---|
| Latin America & Caribbean | 35.9% | 14 |
| Europe & Central Asia | 30.9% | 36 |
| South Asia | 30.6% | 5 |
| East Asia & Pacific | 26.2% | 16 |
| Sub-Saharan Africa | 21.1% | 40 |
| Middle East, North Africa, Afghanistan & Pakistan | 20.8% | 11 |
Latin America & Caribbean leads by a notable margin at 35.9%, driven by top performers like Peru (64.5%), El Salvador (49.0%), and Paraguay (46.8%). This reflects a region where bank lending to the private sector is relatively developed compared to other middle-income regions.
Europe & Central Asia shows the widest internal variation — from Italy at 61.8% to Kosovo at 61.9%, but also includes many countries in the 20-30% range. The unweighted average of 30.9% masks substantial differences between Western European economies with deep credit markets and transition economies where bank intermediation remains shallow.
Sub-Saharan Africa, despite having the most countries in the dataset (40), averages just 21.1%. However, countries like the Central African Republic (43.5%), Benin (41.4%), and Kenya (40.8%) punch well above the regional average. The continent’s low regional mean is driven by a long tail of economies where formal bank lending to firms is extremely limited.
Working Capital vs. Investment Finance: Different Loans for Different Needs
It is important to distinguish working capital finance from investment finance. The existing article on how firms finance investment covers bank loans used to purchase fixed assets. Consider the differences:
- Working capital: Short-term funds for inventory, payroll, supplier payments, and other operational needs. Loan terms are typically shorter (months to a year).
- Investment finance: Long-term funds for machinery, buildings, land, and other fixed assets. Loan terms are multi-year.
Some economies show very different patterns across the two metrics. Italy, for example, has 61.8% of firms using bank loans for working capital but a much smaller share using banks for investment finance — Italian firms tend to self-finance capital expenditure while borrowing for operations. Peru, by contrast, leads on both metrics, with strong bank engagement for both working capital (64.5%) and investment.
For a deeper look at how the two metrics compare, see our broader report on how the world finances business.
The Role of Internal Funds
When firms do not use bank loans for working capital, they turn to other sources. The Enterprise Surveys also track the share of working capital financed internally (from retained earnings or owner contributions), from supplier credit, and from other non-bank sources.
In economies with low working-capital finance rates like Pakistan (3.5%) and Iraq (2.1%), internal funds finance the overwhelming majority of working capital needs. This creates a growth constraint: firms that must self-finance their daily operations have less capacity to invest in expansion, hire new workers, or absorb economic shocks.
By contrast, in high-access economies like Peru and Italy, bank credit provides a cushion that allows firms to separate their operating needs from their cash flow cycles — a form of financial deepening that supports business growth and resilience. For more on how this relates to overall credit depth, see our post on global private sector credit.
Time Trends
The Enterprise Surveys data is collected in waves, making it possible to see how working capital finance evolves. In Peru, the rate fluctuated from 60.9% in 2006 to 66.5% in 2017, then settled at 64.5% in 2023 — relatively stable over nearly two decades. In Kenya, by contrast, the rate rose from 26.0% in 2007 to 40.8% in 2025, reflecting the country’s steady financial deepening.
Italy saw a dramatic jump from 27.8% in 2019 to 61.8% in 2024 — a more than doubling in five years, likely reflecting a post-pandemic shift as bank credit programmes expanded to support business liquidity.
The Link to Mobile Money Savings
There is an interesting connection to the topic of savings. In economies where mobile money is widely used for saving — such as Kenya at 54.4% combined savings — firms also show relatively high working-capital finance rates (40.8%). This is not coincidental: a deep mobile money ecosystem often correlates with broader financial inclusion that extends to small and medium enterprises. For more on this, see our companion post on how mobile money transforms savings.
Sources & Method
All figures in this article come from FinStatGlobe’s derived country datasets, which compile data from the World Bank Enterprise Surveys via the World Development Indicators indicator IC.FRM.BKWC.ZS — “Firms using banks to finance working capital (% of firms).”
The Enterprise Surveys cover registered firms with five or more employees across 122 economies, with survey years ranging from 2006 to 2025. Data is not available annually for all countries; each country’s most recent survey wave is shown in the tables above.
Note that this indicator measures the share of firms that use any bank financing for working capital, not the proportion of working capital that is bank-financed. A firm that gets just 1% of its working capital from a bank counts as a “user,” so the figures above represent the breadth of bank engagement rather than its depth.
See our methodology page for details on how FinStatGlobe processes, normalises, and ranks this data. For a comparison with investment finance, see our article on how firms finance investment.