Absa, a pan-Africa financial institution, has reiterated its commitment to driving trade financing across Africa by providing digital solutions that would help remove impediments to accessing financing products, especially by SMEs on the continent.
The top financial institution delivered its digitization projection in a recent article monitored in the media. First, it identified trade financing as critical financial issue as it has the capacity to deliver higher impact in Africa in particular. The bank advocates for increased value proposition around trade financing and likened it to the oil that greases supply chains and ensures that buyers are sellers fulfil their obligations.
However, the bank further opined that digitisation is a key enabler in democratising trade finance and the pandemic has accelerated the need for wider adoption of digital trade finance solutions by SMEs and corporates.
In the article, Oladapo Adeigbe, Head, Trade Finance and Financial Institutions Trade Sales, Absa, expatiated on some of the impediments to accessing financial products by SMEs. He said, while technology-driven solutions are becoming more and more relevant, much of the trade finance sector is still very paper-driven with manual processes slowing down access to finance.
According to him, “Financial inclusion across Africa is yet to peak as most SMEs operate in the informal sector and are largely unbanked. Hence, their viability cannot be ascertained or assessed directly by financial institutions.”
