AfDB’s former president, last year, expressed his dismay. Young entrepreneurs are departing Africa due to subdued commercial bank lending. Afreximbank, IFC and others have called for a more complete SME finance offer – comprising savings, supply-chain finance, factoring, insurance and embedded finance – to complement fintech and mobile money-led payments, and narrow Sub-Saharan Africa’s $331bn funding gap. Data collected by digital payment players could give banks and insurers a clearer picture of SMEs’ sales, unpaid invoices and inventory, helping assess when businesses require working capital. A broader range of digital financial services could then be embedded into SMEs’ digital accounting, ERP platforms or other non-financial digital channels. How can banks, fintechs and regulators collectively scale this wider, fit-for-purpose range of SME finance?
Key points:
- How can Africa build an SME finance offer it can be proud of and make tangible progress towards closing the gap by 2030?
- What fintech and mobile money data remain underused in supporting supply chain embedded finance and credit?
- Where should regulators set interoperability, digital identity, API and consent standards to support integrated services?