In view of the important contribution which entrepreneurs and micro, small and medium-sized enterprises (MSMEs) can make to economic growth, innovation and employment creation, both researchers and policy makers emphasise the need to obtain a better understanding of the factors that influence the rise and performance of these firms. Academic research has identified particular constraints on the availability of finance for MSMEs, such as informational asymmetries between borrowers and lenders, lack of credit history on the part of many MSMEs, poor legal and institutional infrastructure, scarcity of appropriate credit skills in banks, and economies of scale in lending. To overcome these impediments, many governments, international financial institutions and non-government organizations (NGOs) have established programmes that target the delivery of medium-to long-term credit to MSMEs through financial intermediaries. The European Bank for Reconstruction and Development (EBRD), being the largest development finance lender in the transition economies and one of the largest in the world, has for instance been implementing micro and SME lending programmes that aim to build credit skills for MSME lending in existing participating banks (PBs) and newly established specialised banks known as microfinance institutions (MFIs). EBRD’s lending also aims to develop PBs’ credit procedures that reduce lending costs and to help borrowers build a credit history and lower banks’ perceptions of risk associated with this type of lending. Interestingly, while the objectives of MSME lending programmes are widely accepted as being important, little evidence is available on the impact and longer-term financial sustainability of