Commercial Joint Stock Bank (VP Bank) invested in Ho Thi Hai Ngan, a woman entrepreneur looking to expand her electronics shop.
With capital as one of the larger challenges faced by SMEs, women are challenged at a much larger rate when “lender biases,” according to the article, are being added to the picture. VP Bank decided to be the change and loaned Ngan $25,000; her company is now worth $400,000.
During a workshop for SMEs, hosted by the Bankers’ Committee, Central Bank of Nigeria’s (CBN) Senior Manager for the Development Finance Department, Chinedu Zephaniah shared that poor business habits and fragile financial systems have made it complicated to support SMEs.
“At the moment, we have disbursed N170 billion to support SMEs but the percentage of people that pay back their loan at appropriate time is not encouraging,”
SMEs significant contribution to the growth of the economy in Nigeria is clear, however lending institutions still lack trust.
SMEs in developing countries have had great success due to microfinance. Growth in income and employment are a few of the key benefits SMEs have experienced. Katharina Sommerrock, Philanthropy Advisor at LGT writes for Finews.asia.
However, these benefits are short-lived due to limited financial opportunities for SMES in developing countries. They’ve matured far beyond commercial banks and microfinance institutions, which has impaired their access to funding.
With over one million units sold in the last five years and over 50,000 units installed each month, the PAYGo model makes solar affordable for end-users and provides sufficient margin for providers to scale last-mile distribution. However, for the model to succeed PAYGo operators must retain customers and build a base of loyal and engaged customers. This FIBR project with Zola Electric (formerly Off Grid Electric) demonstrates that machine learning can help them do so. FIBR is a project of BFA in partnership with Mastercard Foundation.
Women have been an integral part of microfinance since the very beginning. But though the percentage of women in top leadership positions in microfinance institutions is high compared to the rest of the global banking sector, it’s still lower than women’s proportion of the overall population – and far lower than the percentage of female clients served by these institutions. Abiskar Shrestha, a senior investment officer at MicroVest Capital Management, explores how the sector can boost female leadership – and how investors can help.
Industry Partner GBA for Women says that digital solutions for product distribution are rapidly increasing banks’ ability to reach the unbanked – a segment disproportionately made up of women. During the recent All-Stars Academy in South Africa, GBA heard from two of its members who are making huge strides in this area: Diamond Bank of Nigeria - also a SME Finance Forum member - and NMB Bank of Tanzania.
In the U.S. financial services market, regulations such as Reg A+ and Reg CF have opened up new avenues for startups to raise financing from a large number of unaccredited investors along with accredited investors. Among the 636 companies that filed forms to conduct new offerings under Reg A+ or Reg CF, 80% of them (514) filed for Reg CF. In addition, the number of unique offerings for Reg CF increased by 267% in 2017 compared to 2016.
Financial inclusions is one of the largest challenges SMEs face today. In part two of Dhaka Tribune’s “At the Core of Our Potential” series, banker, Tarique Afzal sheds light on why this area is restricted for SMEs.
· Banks are more focused on urban-based lending
· Banks are at times reluctant to delegate to rural branch levels
· Lack of interest among skilled bankers to relocate to rural areas
· Uncertainties of the small industries due to lack of skills and knowledge of the borrower
· Economic fluctuations
Startups founded by women receive less than 50 percent of investment funds than those founded by men, even though women are achieving 10 percent higher profits, according to Boston Consultant Group. Tokunboh Ishmael, co-founder of Alitheia Identity, an investment management and advisory firm focused on channeling private equity investments into businesses, has set out to bridge this gap by launching a Gender investment fund. A former banker at Saloman Smith Barney, Ishmael has plans to drive financial inclusion with the fund, which will have US$75 – 100 million to invest.
IFC Vice President Nena Stoiljkovic was in Japan for the international conference "World Assembly for Women: WAW!" talked about support for women.
Of IFC's many missions, supporting female entrepreneurs is very important. IFC has a network of around 800 local banks in developing countries, through which they offer support to make it easier for women to join the market and provide finances for women entrepreneurs in their respective countries.
