Keeping SMEs in business: How alternative lenders are plugging the financing gap, and are now put to the test
As published on The Business Times:
SMALLER enterprises with a lack of track record have traditionally been ignored by big banks due to the perceived risk. With advancements in technology, a world of possibility has opened up when it comes to alternative financing. New ways of credit assessment using data allow alternative lenders to plug the gap, to help small and medium-sized enterprises (SMEs) that fall between the cracks get the financing they need. But with the ongoing Covid-19 pandemic, these lenders are put to the test as the cracks widen, and as SMEs struggle to keep the lights on. The upcoming digital banks may also eat their lunch as they target the under-served small business segment. Three SME lenders tell The Business Times how they intend to compete, what they are doing to step up their game, and how they are bracing for the downturn that lies ahead.