Small and medium-enterprises, or SMEs, represent more than 90% of all businesses across Asia. The contribution of SMEs to trade, jobs, and economic growth is constrained by many factors – one of which is inadequate access to finance.
A 2016 ADB survey showed that SMEs experience the highest rate of rejection – more than half of trade finance proposals sent to banks. Weak finances and a lack of collateral often prohibit SMEs from getting loans or financial support from banks.
Supply chain finance is an innovative way to bring financing to SMEs. It offers a relatively low risk, low cost, and efficient way of getting money to SME suppliers by leveraging the credit rating of large buyers in a supply chain.
