More than half a decade into the global financial crisis, access to financial support for under-served traders and entrepreneurs remains a major concern globally. There is increasing realisation that SMEs and entrepreneurs are being disproportionately affected by unmitigated financial reforms and the sheer pace of their implementation. As they are more financially dependent on bank finance than large firms, SMEs are less able to adapt to significant changes in credit markets. We caught up with the COO of one of the prime Asia’s alternative financiers, Etienne Van den Bogaert of EFA Group, to get his thoughts about the changing landscape of financial and credit support for regional SMEs.
As a market leader in alternative credit strategies, what are your perspectives on driving economic growth in real time?
Our perspective on economic growth is primarily fueled by three drivers: entrepreneurs, finance and education. At EFA Group, we support entrepreneurs and are constantly working on new financing solutions to support them, especially those who have limited credit access from traditional banking sources. To us, the key to encourage financial inclusion is by educating our investors and stakeholders on the importance of financing these companies, as they are the engines of economic growth.
Do you have a role model in the industry that you look up to?
A very famous financier and philanthropist called John Pierpont Morgan. In his time, banking and financing relied on different dynamics and were primarily relationship based, whereas it now evolves towards technology. His contribution at the time has been important for the banking industry as well as businesses. His legacy, known as the J.P. Morgan bank that we know today, is very active in FinTech.
What financial challenges do you foresee for the banking industry for 2016 with EFA Group?
The new banking regulations result in an increase of cost of lending for the banks, forcing them to review their strategy. In the meantime, SMEs have more difficulties accessing financing solutions so the market conditions are excellent for credit funds and FinTech. It’s a simple proposition but one that can be resource and operationally heavy. What’s exciting now is that we see more alternative financiers taking on this role while using technology to make the process simpler and faster. Our aim is to be at the forefront of this market evolution and grow our financing capabilities substantially, resulting in more SMEs being funded.
What do you enjoy most about your job in working with SMEs?
These are exciting times for lending and FinTech in general. The massive shift in the industry drivers provide a fertile ground for new ideas and opportunities.
Are there any interesting projects that you’re currently working on that you could share?
Our new financing solutions are at various maturity stages with some in the assessment phase but a few are being brought to market as we speak. Our aim is to help even more SMEs improve their cash flows. With our new product offerings, we will be extending our reach to fast growing companies in the retail, consumer, information technology, media, e-commerce sectors.
Etienne will be giving a presentation on the alternative financing solutions for underserved SMEs at the 2016 Financial Inclusion Summit on 19th April at the Suntec City Convention Centre. For more information on our speakers and how you could be a part of this exclusive event, click HERE.