Technological improvements, platform-based alternative models, and reverse factoring solutions have the ability to give a lifeline for micro and small business enterprises in Nigeria and other developing markets.
According to a research study conducted by Stears, a macro insights and analytics provider in collaboration with Fiducia, a digital supply chain finance platform, this would promote growth and expansion while bridging the financial gap.
The study highlighted the need for creative financing solutions to assist MSMEs in bridging the substantial financing gap, which the International Finance Corporation has estimated to be $5.2 trillion.
It claimed that these businesses’ potential to expand and scale had been severely hampered by funding obstacles.
The research, titled “Platform-enabled Alternative Supply-Chain Finance: The Case for Factoring and Reverse Factoring,” was launched in Lagos.
The co-founder and head of intelligence at Stears, Michael Famoroti, and a senior associate in digital regulations, Adaobi Oni-Egboma, underlined the significance of MSMEs globally in the research.
The two pointed out that SMEs made up around 90% of enterprises worldwide, provided more than 50% of all jobs, and considerably boosted GDP, especially in developing countries.
Disruptive finance options, driven by technology, are the key to closing the supply chain funding gap, according to the report.
The efficient management of accounts receivable and payable, the promotion of financial stability, and the streamlining of transactions within the supply chain finance ecosystem are all made possible by platform-enabled factoring and reverse factoring.
According to the survey, technology-based options give MSMEs access to a wider range of lenders, increasing their competitiveness and releasing their potential for growth and expansion. Utilizing these cutting-edge approaches, MSMEs may get funding on time and with flexibility, thereby boosting Nigeria’s economic growth and resilience.
