World Bank Credit Gap for SME’s and how to bridge it

03 November, 2015

Welcome back to #MonexoMonday. It’s time we discussed how SMEs around the world are faring and how Monexo can help them stay afloat and perform better.

A World Bank Group study suggests there are between 365-445 million micro, small and medium enterprises (MSMEs) in emerging markets. In Hong Kong alone, they account for 98% of all businesses, 48% of the workforce, and 60% of private sector revenue. Click here for our previous post on this. According to estimates, 600 million jobs will be needed in the next 15 years to absorb the growing global workforce, mainly in Asia and Sub-Saharan Africa. In emerging markets, most formal jobs are with SMEs, which also create 4 out of 5 new positions.

And yet, as it stands, about 52–64 percent of microenterprises in developing economies are unserved or underserved. This points to a credit gap of an incredible $0.5–0.6 trillion globally.

The post-recession economy has increasingly grown risk averse with credit becoming scarce and difficult to get. Formal banking institutions shun credit to projects with even an ounce of default risk. And so, SMEs fall short and several promising ones are forced to call it quits.

SMEs have always been given the cold shoulder by traditional lending options and have depended on internal or personal loans with high interest rates and questionable credibility. To keep the SMEs thriving, there is a strong need for alternative and safe capital sources.

This is where Monexo with peer to peer lending model comes in. As described here, Monexo’s rent cash in loans are a perfect substitute to traditional ones for the SME crisis. Here, the borrower, in need of urgent bridge finance can safely register on Monexo marketplace against rental income of owned property. Applying with completed documentation can get you featured in the marketplace in as early as 24 hours. Yes, that fast! Monexo’s loans are fair with flat interest rates, with declining balance rates (see here). So that financing your SME becomes affordable, easy and swift.

Imagine the 300,000 SMEs in Hong Kong waking up to this revolutionary financing solution! An opportunity that is enough to create a paradigm shift in the economy and society at large.

Do tune soon for #MonexoMonday! Like, share, and tweet us your ideas, questions or comments @WorldofMonexo. #MonexoMonday