‘Explore Alternatives To Restore SMEs Liquidity’2 min read

Dr. Arthur-Annobil said this at a stakeholder conference on the theme ‘Restoring Commercial Bank’s Liquidity for SME Financing post-DDEP: The Role of Impact Investing.’

Speaking on options available to commercial banks to restore their liquidity in order to support SME growth, Dr. Arthur-Annobil said, banks should try as much as possible to partner with impact investment funds, by so doing, they can leverage on their capital and share the risk involved based on the kind of structure that they have.

“I know some banks that are doing this and it’s achieving results. The second thing for me, is ecosystem banking. This requires not just banking with big local companies and multinationals but banking the entire value chains of these businesses. So, all the small businesses are plugged into the big businesses. If a bank does this, it can structure some facilities that enable it to lend to the small businesses that ordinarily may not have access to funding,” he said.

Beyond traditional banking, Dr. Arthur-Annobil stressed the need for stakeholders to build a functioning entrepreneurial finance ecosystem to address the huge funding gap for SMEs and early-stage startup businesses.

He mentioned the need for the central bank and the SEC to develop frameworks around Regulatory Techs to enable both the operations and financing of small business through alternative funding sources like angel investing and crowdfunding.

Dr. Arthur-Annobil also mentioned that big corporate firms should take an interest in establishing Corporate Venture Capital firms to help finance the works of early-stage startups to help them grow.