entitled "Best Markets for Entrepreneurial Finance." This index ranks 121 countries by how easily new and existing firms can access capital.

As PSD blogger Pablo Halykard points out, 17 of the lowest-ranking 20 countries are in Africa, which is the lowest scoring region of the world. Interestingly, the Middle East scores higher than Europe--but this is skewed by countries like Saudi Arabia, whose oil revenues are so high they do not have income tax, and therefore retain more capital.

So what? Well, first, this helps quantify the impact of microloans: the Milken Institute considers microfinance a component of the 7 variables it uses to calculate an economy's business climate. (Even if the Index does give too much weight to external financing.) Second, the Milken CAI Index is reprinted in international news and major publications. For the Index to credit (ha) entrepreneurialism and a faster "pace of innovation" to loans the size of $500 increases the credibility of microfinance. The Index even cites the date of the first MFI in Bangladesh on its "securitization timeline."

Note that the Milken Index is different from the World Bank's 2006 "Doing Business" Index, which ranks 150 countries according to 10 topics. (One of the 10 is "getting credit," by which Botswana scores 4th highest--the United States is 15th. However, I can't find any mention of microcredit in the World Bank's Doing Business methodology. )

An interesting side topic to the importance of microloans on economies is the lack of "meso-loans," or loans between $50,000 and $500,000. These are critical to enabling SMEs to scale. See a previous discussion on Nextbillion here.

For the wonkish and/or curious, the seven variables on which the Milken Capital Access Index is calculated are: Macroeconomic Environment, Institutional Environment, Financial and Banking Institutions (i.e. access to credit), Equity Market Development, Bond Market Development, Alternative Sources of Capital and International Access.