• The results from the study reveal that most respondents (75%) were micro enterprises, supporting the hypothesis that fintechs are a critical component of smaller businesses’ funding cycles. Of the respondent MSMEs, 44% were mature firms that had been operating for more than six years and less than one-third were young firms that had been operating for fewer than three years. Most of the CEOs were men, and one-third had an undergraduate degree and were aged between 35 and 44.
• In terms of the amounts borrowed or raised, the findings suggest that they were concentrated around lower values. Overall, the median amount borrowed or raised was USD3,917 and for 75% of the sample (up to the third quartile), the amounts ranged up to USD20,000. Most MSMEs used the money, with a median value of USD4,023, for working capital. This value was largely influenced by MSMEs that had borrowed from a P2P/marketplace lending platform. By industry, MSMEs operating in traditional industries raised the highest funding amounts, with a median borrowing value of USD8,813. This was followed by MSMEs in the innovative, and commerce and services industries, where the median amount borrowed for both sectors was approximately USD4,000.
• Before receiving funding from a fintech platform, MSMEs had tried to raise funds through different sources, primarily banks or family and friends. Banks were the most popular funding source for those that used P2P/marketplace or invoice trading platforms, while for those MSMEs that used investment crowdfunding or non-investment crowdfunding platforms, it was friends and family. Although many MSMEs sought funding from banks, only approximately one-half received an offer and accepted it. MSMEs that sought funding from family and friends were more successful, especially those that used an investment crowdfunding platform: more than 80% received an offer, all of which were accepted.
• Regarding traditional finance facilities, the type of product used differed by vertical. MSMEs that used P2P/marketplace lending or non-investment crowdfunding platforms relied more on personal financial products, in the form of personal credit cards or personal accounts, to support their business. Conversely, most MSMEs that used invoice trading or investment crowdfunding platforms used business accounts. Friends and family were the traditional facilities that more than half the MSMEs that raised funds through an investment crowdfunding fintech turned to.
• The decision to raise funds through an alternative finance platform was largely influenced by being able to receive funds faster and better customer service. Also, MSMEs that used a P2P/marketplace lending platform reported they were unable to get funding through any other source except a fintech, indicating this was one of the most important decision making factors. A better interest rate was another very important decision-making factor, being reported by approximately half the MSMEs.
• Overall, MSMEs managed to improve their businesses’ financial health as a result of the funding received via an alternative finance platform. Most MSMEs across all business models and platform types increased turnover and net income. However, 20% of those that used an investment crowdfunding platform saw a decrease in net profit, but those MSMEs also reported a significant increase in the business’s value and employment rate (over 60% for both factors).
• Overall, the main impact on the businesses due to funding was an increase in productivity, which was mainly seen for those that used an investment crowdfunding platform (67%). One-third of MSMEs that used a digital lending or invoice trading platform decreased costs. Further, launching a product or service was the result for more than 6 0% of MSMEs that used an investment or non-investment crowdfunding platform.
• Another outcome of receiving funding was a positive change in the use of different financial products. There was a noted increase in the use of savings or checking accounts for entrepreneurs that borrowed from a digital lending or invoice trading platform. MSMEs either decreased their use of or stopped using products such as overdrafts, loan contracts or revolving lines of credit. Interestingly, most MSMEs that used an investment crowdfunding fintech reported no change. However, there were a few for which the use of loan contracts and mortgages increased, and decreased for business credit cards and invoice trading products.
• Regarding the COVID-19 pandemic’s effects on the business, almost half the businesses managed to cope with the crisis and remained operational, albeit with adjustments. Approximately one-third of MSMEs had to shut down operations temporarily and only 3% had to permanently close their business. When asked about government-based assistance, 22% reported receiving it, of which half received a government COVID-19 voucher and emergency funds for payrolls.
• The main assistance offered by fintech platforms was related to payment facilities. For digital lending, invoice trading and investment crowdfunding platforms, the primary types of assistance provided were payment holidays and eased payment plans. For non-investment crowdfunding platforms, it was waiving fees. Completing the top three assistance types offered, across all models, were credit facilities (not related to a government assistance scheme).

By Krishnamurthy Suresh (Principal Researcher, CCAF), Felipe Ferri de Camargo Paes (Principal Researcher, CCAF), Loh Xiang Ru (CCAF), Richard Kithuka (CCAF), Peter Morgan (ADBI), Pavle Avramovic (CCAF), and Bryan Zhang (CCAF).

• Bangladesh
• China
• India
• Kazakhstan
• Mongolia
• Pakistan
• Vietnam

IMF Releases the 2024 Financial Access Survey Results

The Global SME Finance Forum is the largest, most geographically diverse and cutting-edge gathering on SME finance, which brings together experienced global leaders to facilitate the exchange of insights, promote best practices, and chart the future trajectory. Since 2015, its forward-thinking agenda, tackling topics such as sustainable finance and fintech partnership, has attracted C-level industry leaders, leading policymakers, and regulators from around the world. 
 

This year’s Forum will take place in São Paulo, Brazil on September 16-18, 2024, under the theme, “AI-powered Digital and Sustainable SME Finance”.

The conference will bring together executives from leading financial institutions, fintechs, development banks, and other SME experts for discussions around AI’s transformative role in accelerating digital and sustainable trends in SME finance. It will feature a series of thought-provoking speakers and interactive panels that will explore the digital and sustainable transitions taking place in the SME finance sector. Discussions will focus on the growth of AI as a tool for SMEs to move toward sustainability goals and address financial inclusion challenges. The program will visit local SME innovators and hear fintech leaders pitch their cutting-edge technologies. It will also include the Global SME Finance Awards Ceremony and many networking opportunities.
 

With participants coming from across the globe, this conference promises to be an excellent opportunity to make partnerships, learn from peers, and elevate your business game. 

Members and friends of the SME Finance Forum have received exclusive invitation to register.

if you are interested in attending, please send an email to smefinanceforum@ifc.org

LEARN MORE ABOUT THE EVENT

AI Takes Center Stage: Survey Reveals Financial Industry’s Top Trends for 2024

Washington D.C, May 23, 2024 – AgriAnalytica, a leading digital platform for MSMEs in Ukraine has joined the SME Finance Forum as the global membership network’s latest member. The 300+ members/affiliates of the Forum are SME financing experts operating in 190 countries who share the common goal of expanding access to finance to small businesses worldwide through knowledge exchange and innovation.

“SME Finance Forum proudly welcomes leading digital platform for MSMEs in Ukraine to our network. It is with great pleasure I welcome AgriAnalytica to SME Finance Forum which is in line with our strategy of onboarding leading MSME lending solution provider in FCS countries for impact,” said Qamar Saleem, Head of SME Finance Forum.

"AgriAnalytica, a pioneering B2B platform developed by AgriAnalytica LLC with strong support from international donors such as USAID, DSIK, IFC  and EFSE DF, is dedicated to empowering Ukrainian agri MSMEs (Micro, Small, and Medium Enterprises). The platform's mission is to revolutionize access to finance, markets, and knowledge for MSME farmers through innovative solutions. AgriAnalytica addresses the critical challenge of agri MSME access to finance by offering a cloud-based platform and credit  decisioning support technology for agri MSME Lenders  that integrates a comprehensive suite of SaaS/PaaS tools, enabling risk-mitigated, cash flow-based lending. Currently, the platform boasts a network of over 18,000 users from all regions of Ukraine, including those in occupied areas.

Key features include the AGRI Credit Analysis system, which provides detailed financial indices required by banks and regulators, and the AGRI Land module for thorough due diligence on land acquisitions. Additionally, the platform’s AGRI Accounting and AGRI Business Plan tools streamline farm management and business planning, enhancing productivity and profitability. Furthermore, the AGRI-Expert module, with its 220+ registered subject-matter experts, augments current efforts and accelerates new initiatives by reducing R&D and project management costs through specialized knowledge and experience. As an online marketplace, AgriAnalytica connects farmers with banks, suppliers, and buyers, fostering a more integrated and efficient agricultural ecosystem. This comprehensive approach ensures that MSME farmers can thrive in today's competitive market by leveraging cutting-edge technology and data-driven insights."

“As we embark on this journey with the SME Finance Forum, we're excited to leverage its social and professional networking to promote our company and project at high level through its well-organized events,” said Ms. Liudmyla Tymoshenko, CEO & Director of Agrianalytica LLC.
 

SME Finance Forum: Innovation & Partnership for MSMEs Growth 

The SME Finance Forum, backed by G20 and IFC/World Bank, is the leading global network of 300+ members/affiliates operating in 190 countries. Network comprises of SME focused institutions providing and enabling finance and services- banks, non-banks financial institutions, fintech, payment platforms, development institutions, credit guarantee companies, insurers, investment funds, supply chain linked players, banking and SME associations, policy advocates, regulators, academia, consulting houses, knowledge aggregators.

Our members, affiliates, and associated stakeholders benefit from learning/replicating best practices from across the world, innovating new products for business growacquiring risk mitigation tools, establishing partnerships, attracting investors, and being recognized amongst a peer group of global innovators. Our products consist of “members only” solutions (like innovation hubs, solutions clinics, peer group networks, study tours, specialized tools and trainings, member portal repository, partnered initiatives) as well as public good services (200+ publications library, 500+ videos, webinars, newsletters, trainings, annual awards, annual event etc.
Discover the SME Finance Forum members/affiliates: 
https://www.smefinanceforum.org/members/member-list
https://smefinanceforum.org/about/partners
 

AgriAnalytica

AgriAnalytica, a pioneering B2B platform developed by AgriAnalytica LLC with strong support from international donors such as USAID, DSIK, IFC  and EFSE DF, is dedicated to empowering Ukrainian agri MSMEs (Micro, Small, and Medium Enterprises). The platform's mission is to revolutionize access to finance, markets, and knowledge for MSME farmers through innovative solutions. AgriAnalytica addresses the critical challenge of agri MSME access to finance by offering a cloud-based platform and credit  decisioning support technology for agri MSME Lenders  that integrates a comprehensive suite of SaaS/PaaS tools, enabling risk-mitigated, cash flow-based lending. Currently, the platform boasts a network of over 18,000 users from all regions of Ukraine, including those in occupied areas.
Learn more: 
Website: https://agrianalytica.com/en/
Telegram:  https://t.me/agri_trading_shopping
Facebook: https://www.facebook.com/AgriAnalytica
Linkedin: https://www.linkedin.com/company/agrianalytica
Instagram: https://www.instagram.com/agrianalytica/
YouTube: https://www.youtube.com/channel/UC8AT24OZRKmdPLrDRf77W3g
                https://www.youtube.com/@Agrianalytica/videos