cat/credit-and-financial-information
Join EIB and AccessHolding for a discussion of the main findings from an EIB report on Banking in Africa. The 2018 EIB study of banking sectors in Africa finds that in many African banking markets, the last two years saw a pause in financial deepening. However, a rising share of banking groups report improving market conditions and plan a structural expansion of their operations in Africa and a continued push for new technologies.
Effective risk assessment is instrumental in the lending business. According to Medici, technology companies are creating risk assessment models with increasingly inclusive variables that are allowing lenders to reach the previously unbankable population.
Alternative data can improve risk assessment for retail lenders. According to the article, retail lenders can deploy alternative data technology for better customer service delivery, capturing new segments, improving cost efficiency, and enhancing the underwriting process.
BRAC Bank was established in 2001 to help grow the vital, yet unbanked SME sector in Bangladesh. The bank’s reason for being is to serve SMEs; with 186 bank branches, 2,500 specialized SME staff and the provision of more than 60 percent of the collateral-free SME loans in Bangladesh, the bank is doing exactly that.
The overall lending to SMEs by BRAC Bank reached 41 percent of the total loan book at the end of 2017, an increase from 34 percent just two years earlier.
Washington, D.C. September 25, 2018 – Shanghai Zhaoxi Network Technology Co., Ltd. (Zhaoxi) became the newest member of the SME Finance Forum, a global membership network that brings together financial institutions, technology companies, and development finance institutions to share knowledge, spur innovation, and promote the growth of SMEs.
In an interview with Bloomberg BusinessWeek, regional CEO of Africa and the Middle East for Standard Chartered Bank, Sunil Kaushal shared his plans and partnerships with India and UAE.
Kaushal shared,“Mmy vision is to build up a business which delivers a solid result and generates the right returns for all our stakeholders – but on a sustainable basis with a strong foundation of controls and compliance.”
Research from SME Finance Forum member Xero revealed, that SMEs in Australia would borrow $80 billion over the next year, if funding was available. According to the research, SMEs reasoning for difficulty borrowing from a lender include:
The Xero State of Lending report showed, one in five small business owners stating access to capital as the greatest hurdle or perceived threat for long-term growth aspirations.
The APEC Policy Support Unit just released a new assessment of its Ease of Doing Business (EoDB), which says that the "area of Getting Credit recorded the greatest progress." This is accounted for improvements in two areas - secured transactions legal framework (strength of legal rights) and credit information - where APFF work (in collaboration with IFC/WBG) has focused on helping economies enact legislation, establish collateral registries and credit information systems and license credit bureaus, among others.
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.”
A packaged financial solution, launched by Co-operative (Co-op) Bank of Kenya, will go towards supporting MSMEs.
Co-op Bank of Kenya has worked with the International Finance Corporation (IFC) over the past year, to understand the inner-workings of the MSME business segment to improve MSMEs. Co-op Bank will offer training programs, forums and financial tools to build and grow “world class entrepreneurs,” according to the article.
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.
