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The Future of Business Survey in collaboration with Member World Bank, Facebook and OECD provides monthly data on the economic environment for SMEs around the world. Key findings in the publication included:
Alternative lending is looking more attractive to SMEs working to find affordable funding solutions for their business. According to Medici, alternative lending is focused on commerce and not credit. For example, “PayPal offers working capital loans to small businesses that transact more than $20,000 within 12 months.”
IFC will provide $55 million to BIND Banco Industrial to increase the bank’s lending to SMEs in Argentina. The funds will allow BIND to offer SMEs longer-term financing options.
According to the article, even though SMEs are essential to job creation and growth, “more than 70 percent of Argentina’s SMEs have difficulties accessing financing.”
SMEs that must be de-risked are experiencing issues with access to finance, however blockchain may be the answer to their problem. Dubai-Based Global Anti-Money Laundering, Risk, Governance and Compliance Professional, Maureen M., explores the benefits of blockchain and their ability to transform how SMEs are perceived by financial institutions (FI).
Money laundering plays a significant part in the lack of trust from FIs towards SMEs. According to the article, “Money launderers can explore these loopholes and set up SMEs in different countries and use them to launder funds.”
The Office of the Comptroller of the Currency (OCC) is now accepting applications for national bank charters from fintech companies active in the “business of banking.” The company must engage in the following:
Women in the Western Cape are dominating the SME industry. According to the article, “women-owned businesses experienced 50 percent more growth than businesses owned by men in the Western Cape.” This boost can be contributed to women making smarter investment decisions, according to a survey conducted by Retail Capital. Key points revealed in the survey regarding women entrepreneurs were:
The vision of affordable lenders is that everyone should have access to affordable and appropriate credit, delivered in a fair, respectful and responsible way. Affordable lenders are typically social purpose lenders, such as responsible finance providers and credit unions.
MSMEs need loans and grants to thrive in emerging economies. Mastercard's and Unilever's CEOs have a solution. SME Finance Forum member Mastercard is working with Unilever on new lending models for micro merchants in Kenya.
Ajay Banga is the president and CEO of Mastercard. Paul Polman is the CEO of Unilever. Their Fortune piece highlights they ways the two achieve scale and long-term growth for SMEs, by bringing together tools, data insights, and partnerships from across different sectors to change the model of small business financing.
SME Finance Forum member Development Bank of Nigeria is working to aid in providing finance to MSMEs. Calling it a "nightmare," its Managing Director/Chief Executive Officer, Tony Okpanachi, was appointed in 2017 with the mission to alleviate the financing constraints faced by MSMEs and small corporates in Nigeria. The Sun says his job remains to provide financing, partial credit guarantees and technical assistance to eligible financial intermediaries on a market-conforming and fully financially sustainable basis.
Small-scale entrepreneurs in Sub-Saharan Africa generally struggle to get loans because they lack the required collateral or credit history. Digital credit offers a potential solution to this problem, since the usage of a mobile money service generate data that can then be used to automatically assess the creditworthiness of the user. In Madagascar, IFC and the Mastercard Foundation partnered with microfinance bank Baobab to test the viability of digital loans.
