Series 3: The Impact of COVID-19 on SME Financing in Africa, June 16th

A moderated discussion with a focus on identifying key building blocks, opportunities, and challenges such as access to finance, technology, business formation, business environment & infrastructure. In this web forum, our panelists discussed;
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1. The real effects on the ground for SME’s.
2. The plans that are being implemented to curb further negative effects on the market.
3. Future strategies that organizations can rely on to remain resilient and afloat.
4. Opportunities and methods of enabling new growth.
5. Predictions of the paradigm shifts for SME financing.

Session Brief

Video

Audio

Chair WebForum: Sophia Bekele, Founder & CEO - DCA Group/CBS International, Africa/USA

Ms. Bekele started by acknowledging that since the crisis began, the world has been presented with a moment for a great rethink at all levels as we now face many overlapping issues. She also appraised the forum of the statistics that Small and medium-sized enterprises (SMEs) create about 80% of Africa’s employment, thus establishing a new middle class and fueling demand for new goods and services.

Panelist: Michael Monari, Founder & CEO - Longitude Finance, Kenya

Mr. Monari stated that since the COVID 19 struck, SME’s have been the most affected due to their business models, and the lack of existent facilities to rescue them due to the uniqueness of the crisis. He emphasized that businesses need to diversify and change the models as well as find other channels to improve chances of survival post-crisis.

Panelist: John Kuria Kariuki, Founder & Group CEO - FinCredit Limited, Kenya

Mr. Kariuki, also a Board member the Association of Microfinance Institutions of Kenya (AMFI), said that SME’s are affected differently by the COVID-19 due to the different business models, with businesses that use branchless models are slightly better. He urged that this is a moment to upscale, diversify, and improve technologies and infrastructure that supports online business, eCommerce by leveraging new technologies and operations, as COVID 19 Crisis has forced a rethink of our general work environments. 

Panelist: Pamela M. Njuguna, Head of Business & Marketing - Credit Bank, named 'Girl Boss' by BusinessToday Kenya

Ms. Njuguna stated, since the crisis began, the regulators have made adjustments to enable financial lending institutions to cushion the SME market from the COVID 19 crisis. She emphasized the importance of moving to the low-touch economy that allows for business continuity despite the social distancing procedures. Pamela mentioned that her organization is passionate about women-led businesses and that their organization is in the process of initiating facilities to offload financing to such businesses in the coming few months.

 

Panelist: John Ngumi, Executive Director - Eagle Africa Capital Partners Limited, Kenya

Mr. Ngumi, also current Chairman of Kenya Pipeline Company Ltd, and Wananchi Group and a Director at the Kenya Private Sector Alliance indicated that due to the work from home practice enforced by the government's COVID 19 mitigation procedures, there has been an increased use of the internet and as such the company has been triggered to enhance the staffing and broadband capacity to manage the new clients that come from the education, religious and other work channels. In the concluding words of Mr. Ngumi, WE WILL SURVIVE.

 

Panelist: Erick Yong, Co-founder & CEO - GreenTec Capital Partners, Cameroon/Germany

Mr. Yong stated that, despite the challenges in drop of liquidity and problems in the SME’s and the impact of confinement in Africa is different from Europe, there has been and increase to digitization and that there are more opportunities in sectors such as agriculture. He added that the crisis presents the best moment for SME’s to investigate what kind of innovations are close to their work, so that these businesses could leverage on the skills from the young people in Africa who already have acquired this knowledge.