MEDA and Financial Access (FACM) with its subsidiaries Financial Access Commerce & Trade Services (FACTS) Kenya and (FACTS) Uganda are collaborating to improve access to supply chain finance for SMEs in Kenya, Uganda and Tanzania.
SME finance is systematically underfunded. Small and growing businesses create around 80% of the region’s employment, establishing a new middle class and fueling demand for new goods and services. These businesses face challenges due to lack of access to credit, which remains a hurdle for many SMEs in Africa.
It is estimated that 80% of SMEs cannot fulfill their growth potential due to lack of working capital. Financial institutions base their credit decisions on the availability of hard collateral (land and/or buildings), which business owners might not have access to.
Delayed payment (of sales invoices) is a universal problem for SMEs. In Africa, many companies and businesses are forced to close every year to due to delayed payment issues. Yet financial institutions limit credit exposure to 3-6% of their loan portfolios. This is economically unwarranted and social unsustainable.