Capital Markets and Securitization

The European Small Business Finance Outlook for June 2019 provides an overview on equity finance and how SME securitization market has performed well, showing low default rates in Europe. Special chapter dedicated to Fintech. The report also highlights that one in four SMEs still report severe difficulties in accessing finance, pointing out significant structural credit market failures which prevents market supply from satisfying SMEs’ financing demands.

CreditEase, a SME Finance Forum member, announced that its direct investment arm, CreditEase FinTech Investment Fund (CEFIF), led the investment of Qupital's Series A capital raise of USD 15 million, with additional capital injections from the Alibaba Entrepreneurs Fund and MindWorks Ventures following their initial investments in the seed round. Qupital plans to use the funds to expand their presence in mainland China, enlarge their technology development and risk management teams, and strengthen its fast-growing, cross-border e-commerce expansion.

With more than $3 trillion in assets under management—nearly $800 billion of which is allocated to emerging markets—private equity can be a powerful source of financing, especially for innovative businesses that cannot access bank loans or capital markets. Investors and funds with stakes in these privately owned companies not only help them expand, they also contribute to generating jobs, tax revenues, and better services.

IFC’s new report—Moving Toward Gender Balance in Private Equity and Venture Capital.  

This International Monetary Fund paper highlights the macroeconomic relevance of SME financial inclusion in the MENAP and CCA regions and offers policy considerations to scale up SME financial access. "Financial Inclusion of Small and Medium-Sized Enterprises in the Middle East and Central Asia" focus is primarily on the macroeconomic and policy aspects of SME financial inclusion, and not all issues relevant to SME financing are covered.

Impact Entrepreneur and Rockefeller Philanthropy Advisors have released, Building an Impact Economy: A Call to Action for the Philanthropic Sector. The document is a distilled version of the longer report that features a roadmap and call to action for philanthropic organizations "to use their capital in a way that more directly supports the development of an impact economy; and to align their investments and actions overall with the underlying values inherent in an impact economy.”

Navigating the complex regulatory landscape can be a daunting task for both established business as well as start-ups looking to enter the UK financial market. To assist organizations looking to start an online finance business in the UK Katipult consulted some of the top experts in the space. This webinar is will provide you with actionable tips that will allow you to get a better understanding of this complex legal framework.   

Aiming to further support the development of the real economy, optimize the liquidity structure and lower financing costs, the People’s Bank of China (PBC) has decided to lower the required reserve ratio for financial institutions by 1 percentage point, 0.5 percentage point of which will be cut on January 15, 2019 and a further 0.5 percentage point on January 25, 2019. In addition, the outstanding MLFs due to mature in the first quarter of this year will not be renewed.

While companies that have a positive environmental or social impact are critical to driving sustainable growth, many of these companies, and particularly the smaller ones, face difficulties in accessing and attracting funding. Where more common financing channels (such as bank loans and bonds issued by large corporations with steady cashflows and deep balance sheets) may not be available, PE/VC could provide at-risk capital for many of these young, often innovative companies.

This analysis provides an overview of the main markets relevant to the EIF. It starts by discussing the general market environment, then looks at the main aspects of equity finance and the guarantee and SME securitisation markets and, finally, it highlights important aspects of microfinance in Europe. A chapter on Fintech also complements the analysis.