African small and medium enterprises’ (SMEs) financing gap is proportionally much greater than other regions, primarily because it is working from such a low starting point, McKinsey & Company South Africa said this week in Johannesburg, adding that diversified economies have a greater proportion of informal and micro enterprises and greater access to finance than other economies.
|Issa Sikiti da Silva|
Gary Pinshaw, a partner of the International Finance Corporation (IFC), said an increase in access to finance for African SMEs will require a transformative and innovative approach such as follows:
- Improve the enabling environment, for example greater protection for creditors, enabling technology-enabled business models such as mobile banking to make it easier for informal enterprises to register.
- Strengthen the financial infrastructure, for example credit bureaus, collateral registries, well-functioning payments system.
- Establish a global SME Finance Forum and global platform to build capacity, and mitigate risks and promote innovation and foster SME finance sustainably.
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