Absa, a pan-African financial institution, reiterated its commitment to boosting trade finance across Africa by providing digital solutions that would remove barriers to access finance, especially for SMEs.
The finance organization has identified trade finance as a critical factor as it can have a greater impact for Africa. The bank, which delivered its digitization projection in a recent article, advocated an increased value proposition around trade finance and likened it to oil that greases supply chains and ensures that buyers and sellers fulfill their obligations.
The bank further noted that digitalization is a key enabler for the democratization of trade finance and that the pandemic has accelerated the need for wider adoption of digital trade finance solutions by SMEs.
Head of Trade Finance and Commercial Sales of Financial Institutions, Oladapo Adeigbe, listed some of the barriers to SMEs accessing financial products, adding that technology-driven solutions are increasingly relevant.
“Financial inclusion in Africa has yet to peak as most SMEs operate in the informal sector and are largely unbanked. Therefore, their viability cannot be established or assessed directly by financial institutions.
“The obstacles that hinder the growth of the informal market have not been effectively overcome. For example, an average transaction that involves, for example, customs clearance at local ports requires tons of paper documents, which slows down business activities by forcing unnecessary bottlenecks in the supply chain,” he said. -he declares.