The Challenges and Opportunities of SME Financing in Africa
The London Stock Exchange released a report detailing the issues faced by SMEs and opportunities with financing in Africa.
SMEs account for about 90 percent of Africa’s businesses and the driving force of the continent’s economic development, yet they are still facing financial barriers.
Key challenges SMEs are facing include:
- Inefficiency of African capital markets in supporting SMEs
- Low capacity and the need for upskilling and training
- Minimal visibility to a broad investor base
- Absence of government-led SME strategy to develop the ecosystem
The report suggests the following to tackle these financial challenges:
- Implement internationally recognized capacity building programmes for SMEs and the creation of SME hubs
- Raise the visibility and awareness of leading African private businesses
- Establish a public registrar for African businesses
- Government policies should support and aid SME development