Is it possible to increase GDP, reduce unemployment and improve income distribution by providing small and medium enterprises (SMEs) better access to capital markets? In this study, we used a CGE model of Argentina to address this question and to evaluate the economy-wide net impact accounting for the reallocation of resources from other sectors. We find that although the benefits in question could be attained, SMEs should also be expected to self-exclude from programs that provide access to capital markets if that access is contingent upon higher formalization. Formalization can be expensive for SMEs. Additionally, this model estimated the gains in productivity necessary to incentivize SMEs to formalize and to voluntarily access capital markets; however, after gaining productivity, the SMEs created fewer jobs than initially expected.