Africa: Expanding access to trade finance is necessary for SMEs
November 29th, 2021 – When it comes to enhancing access to trade finance for African small and medium-sized enterprises (SMEs), current challenges call for innovative solutions.
The African continent represents a market of approximately 1.2 billion people – most of whom are under the age of 30 – and a collective GDP of $2.5trn, but currently accounts for a small portion of global trade (2%). Intra-Africa trade is also low, about 18% of the total for the continent, representing a missed opportunity for African businesses.
The majority of trade participants in Africa are SMEs. In 2020 alone, sub-Saharan Africa was home to 44 million micro, small, and medium enterprises, which provide an estimated 80% of jobs across the continent.
Due to their smaller size and sometimes less formal procedures – including lack of digitization, audits, and credit history – these firms often struggle to secure the financing they need to scale trade operations effectively, holding back both their own development and that of the economy overall.
Written by The Africa Report
Photo: Global Trade Magazine
Related Post
COP29 can ensure SMEs thrive in...
The transition to a just, resilient, net-zero future is not possible without small and medium-sized businesses, known as SMEs. They are the ...
Financing SMEs and Entrepreneurs 2024
Since 2020, a series of shocks to the global economy has had significant impacts on small and medium-sized enterprises (SMEs) and entreprene...
SMEs can benefit from integrating growth...
Accounting for about 30% of global greenhouse gas emissions, the industrial sector is accelerating its efforts to achieve net zero by 2050 ...
