Bridging the Financing Gap: FinTech solutions vital for MSME growth, says GCB Deputy MD

Deputy Managing Director of Operations at GCB Bank, Emmanuel Odartey Lamptey, has highlighted the indispensable role of Micro, Small, and Medium Enterprises (MSMEs) in Africa’s economic landscape, underscoring their capacity to generate employment, alleviate poverty, and bolster the continent’s GDP.

Speaking at the esteemed 3i Africa Summit themed, “Unleashing Africa’s Fintech and Digital economic potential”, Mr Lamptey emphasized that despite their pivotal role, MSMEs grapple with formidable challenges, chief among them being restricted access to financial resources and regulatory hurdles impeding their expansion.

“These enterprises frequently encounter difficulties including limited access to finance and regulatory barriers such as excessive bureaucracy which hinder their expansion and adversely impact their operational efficiency,” he posited.

the Deputy MD pinpointed a staggering $300 billion financing gap plaguing MSMEs across the continent, delineating the financing gap as both a challenge and an opportunity for FinTechs and financial institutions.

In his discourse, Mr Lamptey articulated how the burgeoning FinTech sector could serve as a potent catalyst in bridging this divide and catalyzing financial inclusion, provided it is harnessed judiciously and accompanied by stringent risk mitigation measures.

The Deputy MD speaking further at the Summit, extolled FinTech firms as transformative agents reshaping the financial landscape, propounding a myriad of innovative solutions ranging from digital lending to mobile money, peer-to-peer lending, and pioneering micro-insurance products.

These advancements, he asserted, democratize access to financial services, rendering them more accessible, affordable, and user-friendly for marginalized entities, including women-owned MSMEs.

However, amidst the laudable strides made by FinTechs towards financial inclusion, Mr Lamptey highlighted the risks of FinTech proliferation enumerating risks such as fraud, cyber threats, money laundering, and data breaches, underscoring the importance of preemptive measures to safeguard against these growing threats.

Notwithstanding these risks, the Deputy MD championed the profound impact of FinTech on MSME growth, contending that the benefits far outweigh the risks when underpinned by robust consumer protection frameworks and regulatory oversight.

“The contribution of FinTech’s to the growth of MSMEs far outweighs these risks when appropriate measures especially robust-consumer protection rules and clear regulatory frameworks are implemented,” he averred.

Furthermore, Mr Lamptey underscored the pivotal role of financial literacy initiatives spearheaded by governmental and developmental entities, positing them as indispensable tools in empowering MSMEs to leverage FinTech solutions effectively.

He exhorted FinTech enterprises to pivot towards a customer-centric approach, customizing their offerings to cater to the diverse needs of MSMEs, thereby augmenting their overall experience.

Mr Lamptey’s address reflected the need for a relationship between FinTech innovation and MSME empowerment in Africa, advocating for a balanced approach that harnesses the transformative potential of FinTech while mitigating associated risks through collaborative engagement and robust regulatory frameworks.

Source: Norvanreports