BLOG POST
Growing Access to Finance Across West Africa
By CHIOMA OKORIE
NOVEMBER 23, 2023
The Center for Strategic Enterprise Development (CSED) embarked on a transformative journey to enhance financial inclusion across West Africa, particularly targeting Nano, Micro, Small, and Medium Enterprises (NMSMEs).
The financial inclusion platform, initially launched in Ghana and Nigeria, aimed to provide credible record-keeping solutions and facilitate access to funding through collaborative efforts with financial institutions.
This impactful program unfolded in partnership with the Sekondi Takoradi Chamber of Commerce & Industry in the Western Region of Ghana, acting as the hosting partner for the initiative.
A comprehensive examination of inclusive finance practices underscored a common challenge faced by most SMEs: inadequate business record-keeping. The prevalent use of paper documentation, often unsuitable for financial institutions, revealed a significant gap in financial literacy among these enterprises. Additionally, a prevailing assumption among SMEs that institutional financing processes are cumbersome or that they may not qualify further hindered their engagement with formal lenders.
Consequently, many SMEs resorted to alternative, less sustainable funding sources, such as relying on family and friends or liquidating personal assets. Simultaneously, lenders, investors, and grant-providing organizations expressed apprehension due to the perceived high risk associated with MSMEs, primarily stemming from challenges in business data management. CSED's MSME inclusion finance technology platform emerged as the strategic solution to this multifaceted challenge, offering benefits for MSMEs, funders, and SME support organizations.
"Following successful pilot implementations in 2022 and 2023, the focus has shifted towards building strategic partnerships."
Engagements with government agencies and private sector entities, including discussions with prominent organizations like MTN Nigeria, aim to leverage existing logical links for scaling up the impact of this solution across Africa starting in 2024.
By addressing the critical gaps in financial literacy, record-keeping, and perceived complexities in financing processes, CSED's financial inclusion platform stands as a beacon for fostering sustainable economic growth and empowerment for NMSMEs across the region.
Published Date: November 23, 2023