History has shown that the demand for technological advancement spiked during times of crisis. It is those who are having innovative technology that thrives as they turn challenges into opportunities.
At the onset of the novel coronavirus pandemic last year, strict enforcements were imposed across the world. Forcing people to wear masks, practice physical distancing, frequent hand washing, and staying at home as much as possible. These are enforced to minimize transmitting viruses. Resulting in the rise of default businesses and a spike in unemployment. While many businesses have been hardly hit by the crisis, technology-driven industries faced a massive demand to come up with innovative technology to help people cope with the difficult times. Businesses with technology as drivers are coming up at the forefront.
Digital banking is ramping up technology
According to Tunde Kehinde of thenextweb, digital banking has been ramping up among the financial services industry. In Europe, a 72% increase in fintech apps usage in smartphones or iPhones has been noticed in March 2020 alone. In the UK, for the first time ever around 6 million downloads of digital banking apps happen in just a month.
Technological adaptability gives SMEs the better chance to survive or even thrive given the challenging environment. SMEs are known to be the backbone of any economy. They are recognized for their significant role in addressing poverty and generating wealth. The survey shows that around 80% of all jobs are covered by SMEs.
Huge funding gaps for SMEs
However, according to the International Finance Corporation (IFC), there is a huge funding gap of around US$4.5 Trillion for SMEs every year. Aside from that, the SMEs have been the most hardly hit by the crisis. Many of them are in need of financial support so that they can survive to protect jobs, and as they poise themselves to participate in the road to recovery.
Trading is not conducive for now, and may not go back to where it came from. Some companies have increased spending particularly as they try to ensure the safety of their workers. Others are adjusting their focus and business models to meet the new needs of a changing world.
Change to technology is inevitable
This is true also to financial services; the traditional way of lending will not be conducive to bring cash to SMEs quickly. Especially to some companies who are on the brink of closure. In Nigeria for instance, it will take up to 1 ½ month for businesses to know whether their loan application is approved.
This is where fintech lenders have bridged the gap. They use smart machine-learning algorithms for borrowers to conveniently access credit in just about 24 hours. In these challenging times, the fast-borrowing options provided by fintech lenders have become a lifeline to some SMEs.
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