Banks and other traditional non-banking financial companies are weakened with non-performing assets and do not like to extend short-term financing to businesses that deem risky especially start-ups and SMEs.
To mask the risk, they accept collateral. Since most SMEs do not have collateral to give, they lose out on the short-term financing offer
To avoid short-term financing from banks, most SMEs turn to money market lenders for their financing needs. These lenders charge interest rates of 2-3% per month and do not offer flexibility in repayment conditions.
How are Fintech companies making access to funds easier than ever before and are successfully filling the financial gaps faced by SMEs?
Read more: EABW Digital