Global remittances are expected to rise from $468 billion in 2010 to $667 billion in 2019 along with new investment channels bringing in an extra $73 billion a year in Commonwealth countries.
Crowdfunding platforms have the potential to make a significant difference for SMEs in developing countries, however rules and regulations around crowdfunding in these countries are non-existent, according to the article.
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.
Nordic Banks are shifting their focus toward more technology implementation to gain a competitive advantage against non-traditional fintech competitors.
According to the article, several Nordic banks have plans to move their branch services completely online.
“Like many banks, we must face the reality of change,” said Timo Ritakallio, OP Financial’s CEO. “We need to transform in a way that best serves the needs of our customers. Changing to a more technology-rich environment will also create a significant number of new opportunities.”
Africa's Times of News, provided insights to the IFC estimation that Africa’s finance gap for small and medium enterprises (SMEs) stands at $331bn. Micro, small and medium enterprises (MSMEs) form the backbone of most African economies and investment in this sector will significantly enhance job creation and wealth development. The informal sector contributes 38% of sub-Saharan Africa GDP yet 51% of the continent’s 44m formal MSMEs lack the finance necessary to grow. The true scale of the shortfall is almost certainly even greater given the lack of data.
To increase competitiveness SMEs are urged to join global value chains. According to the article, lack of quality supplier-buyer relations with multinationals is hindering SMEs access to electronics global value chains.
A World Bank report says only 300 Vietnamese firms are completely eligible to connect with the world’s production chains.
Fintechs understand the importance of access to finance for SMEs and so do companies.
With about 95 percent of SMEs contributing as much as 30 percent of the country’s gross domestic product and are employing about 60 percent of the country’s workforce, companies like First Circle are rising to the occasion. The company, which provides business financing for SMEs in the Philippines will soon be launching a credit facility worth up to $30 million, according to the article.
In the G7 Executive Talk Series briefing report, the critical role of women in the cryptocurrency sector is examined. According to the report, 95 percent of males are bitcoin users while on five percent are females. One key element explaining the cause of this imbalance is due to the psychological theory that men take more risks than women, according to the article.
Steps to take to deter the gap include:
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.”
SMEs that must be de-risked are experiencing issues with access to finance, however blockchain may be the answer to their problem. Dubai-Based Global Anti-Money Laundering, Risk, Governance and Compliance Professional, Maureen M., explores the benefits of blockchain and their ability to transform how SMEs are perceived by financial institutions (FI).
Money laundering plays a significant part in the lack of trust from FIs towards SMEs. According to the article, “Money launderers can explore these loopholes and set up SMEs in different countries and use them to launder funds.”
