Small and medium sized enterprises (SMEs) are the backbone of every nation’s economy and the driving force behind job creation, yet many fail within just a few years. They face many obstacles including access to financing, competition from big business, cash flow, and government requirements - all of which may prevent them from growing into bigger businesses. CEB research discovered in 2013 that competition from big business grew to become the number one challenge facing small business, ahead of even cash flow and poor sales. By 2015 the magnitude of the competition problem increased even further. Unlike small businesses, big businesses possess the access to, and effectiveness in implementing, technology to give them a competitive edge.
Enter, the FinTechs (“FinTech”, a portmanteau of “finance” and “technology”, is defined as technological innovation in the financial sector). Following the 2008 financial crisis, FinTech disruptors stepped in to provide alternative ways for SMEs to launch, run, and grow securely into the future. FinTech is seeing a rapid growth of startups entering the SME market as data, internet access, and customer acquisition becomes more available within increasingly supportive regulatory environments. These include peer-to-peer lending platforms, accounting, merchant and e-commerce finance platforms, invoice, supply chain finance and online trade finance platforms, and big data business analytics tools, to name a few.
The underserved potential of FinTech for small business is enormous. Governments, financial institutions, entrepreneurs, and investors alike can both support and benefit from this trend. Of the many FinTechs to respond to the challenges faced by SMEs, here are some of the best in the world.