Innovations in Delivery Channels

Nairobi/Singapore, 7 May 2019 - The Central Bank of Kenya (CBK) and the Monetary Authority of Singapore (MAS) today announced the inaugural Afro-Asia FinTech Festival, to be held in Nairobi, Kenya, from 15 to 16 July 2019. Jointly organised by the two central banks, the Festival – the first of its kind globally – will provide a platform for connections, collaborations and exchange of ideas between Africa and Asia.

There is a shortage of credit data on MSME borrowers — also referred to as ‘thin file’ borrowers, since MSMEs lack access to traditional credit facilities through banks and other traditional lenders. The authors in this World Bank Group blog say that this information asymmetry has paved the way for identifying new ways to assess the creditworthiness of MSME and other thin-file borrowers—including the use of alternative data in credit reporting.

During the Global SME Finance Forum 2018, Zhaoli Meng, Dean of JD Finance Institute detailed the power of JD’s logistics and how it is working to serve more SMEs. 

JD.com is China’s largest online retailer and its biggest overall retailer, as well as the country’s biggest Internet company by revenue. They have 400 million consumers, among those 200 million SMEs.

“We help SMEs sell their product [along] [with] [providing] financial services,” Meng shared. 

The journey from unbundling to rebundling and back has been a formidable one. Emerging technologies and the pace of innovation are driving changes throughout the banking industry at an unprecedented rate. From Asia to Europe, U.S. to Africa, and Australia to the Middle East, consumers are not only increasingly adopting digital – most are demanding it. While the movement toward our ability to bank anywhere is inevitable, the path towards transformation varies from one region to the next – and very different models have evolved within each geography.

The Small Business Lending Survey is a nationally-representative survey of U.S. banks and their small business lending practices. The report of survey findings offers new information for both small and large banks on many aspects of their small business lending. The results provide context for the implications of current bank consolidation trends on U.S. small businesses. Approximately 1,200 banks—about one-fifth of the FDIC-insured institutions in the United States—responded to the survey.

During the Global SME Finance Forum 2018, Ankur Mehrotra, Managing Director of Grab details their expansion from a ride-hailing app to the largest offline-to-online (O2O) platform in South East Asia. 

‘We have taken the Grab financial umbrella from E-Wallet - to cater to those without a bank account - to other forms of financial services such as lending and insurance. We started lending to our drivers because we have very good data on their ability to pay and therefore the price of that credit risk is lower for us than it would be for a high street bank’.

SME Finance Forum member Fidor has been recognised by Celent as a winner of a “Model Bank of the Year” for its novel marketplace, Efficient Scale. The award was presented at a formal awards ceremony during the annual Innovation and Insight Day in New York.

Radoslav Albrecht is the Founder and CEO of Bitbond, a global lending platform for small business loans. The SME Finance Forum member, leverages blockchain technology to connect creditworthy borrowers with individual and institutional investors. Recently, Anthony Manfre interviewed Radoslav to learn more about how Bitbond is leading innovation in the lending industry.

Financial inclusion and its role in economic development was highlighted at the G20 meetings in 2017 and again in 2018. Small and medium-sized enterprises (SMEs) have been shown to account for the creation of significant numbers of new jobs, but an estimated two billion people around the world lack access to an account for even the most basic financial transactions, such as making deposits and receiving payments. The world clearly needs an innovative way to democratize finance, and we maintain that fintech can help expand access to finance and equalize opportunities.