Small businesses in South Africa need one thing when applying for finance – speed. They don’t have the luxury of time to wait for funding or loan applications to be assessed. They need a fast turnaround time, to keep the tills ringing and the customers happy.

Fast access to business funding is one of the most significant challenges faced by SMEs. Traditional banks tend to have strict funding criteria, which can also take time to go through the necessary channels.

“The SME sector needs a fast and friendly experience when they deal with finance providers. By using modern technology, it has become entirely possible to automate the entire process. This is the empowering impact that fintech can have on this key economic driver,” says Tom Stuart, CMO for SME business-funding provider Lulalend.

Read also The Top 10 Googled Terms by South Africans in July 2022

It is estimated that between 50 and 60% of the country’s workforce is employed by the SME sector. Many small businesses are still in the throes of digital transformation, with a white paper by the World Economic Forum citing that most SMEs are still at a low to moderate level of digital transformation.

“Fintech has a real role to play in empowering small businesses to achieve their full potential. If they succeed, our economy succeeds,” says Stuart.

Technology, he adds, allows fintech to fully digitise the entire decision-making process. By developing bespoke risk assessment models (driven by AI technology), which are tailored specifically to assessing SMEs, these businesses can make instant credit decisions and often at higher approval rates than traditional lenders who are using outdated credit models.

Read also Nigerian Fintech Startup TeamApt Raises $50M+ New Funding

There is an opportunity for fintech to deliver better value to SMEs and play a meaningful role in helping the sector grow.

“SMEs want more than just a repackaged and repurposed retail banking offering. Instead, they want something that shows that banks view them and their business with the seriousness it deserves,” says Stuart.

One possible explanation, he believes, for this mistaken view is that banks consider SMEs as one homogenous entity – when it is anything but. “You can’t treat a small IT firm in the same way that you would treat a hairdressing salon. They have different needs and challenges, and their growth trajectories are also unique and very different from those followed by bigger companies.

Read also GrubTech Partners With Geidea To Incorporate Payment Options Into Cloud Kitchen Management In Egypt

“Our economy needs the SME sector to succeed. By giving them the skills and respect, they deserve, they can put our country on the path to economic recovery.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry