Make use of digital solutions to increase access to finance. In economies where formal links between banks and smaller businesses are less prevalent, digital and mobile platforms should be viewed as credible alternatives for the disbursement of emergency support.
In some regions, mobile operators, payment services and fintech firms have a broader reach than banks—with, for instance, mobile wallets reaching 60% of adults in Sub-Saharan Africa. Where necessary, we encourage governments to support the development of essential data ecosystems to enable emergency lending to be channelled through these platforms without delay.
Adopt risk-based “Know Your Customer” (KYC) rules to avoid funding backlogs. Currently, the same KYC rules are applied by financial institutions to small and large businesses alike. Implementing effective risk-based KYC approaches could reduce the time to obtain a loan for MSMEs from a few weeks to a few days. Platforms such as SWIFT’s KYC Registry—which acts as a centralised and standardised KYC platform for all banking relations—could also enable further time efficiencies.
Leverage supply chains. Relationships between high-quality buyers and MSME suppliers are an underutilised channel to deploy short-term liquidity to small businesses at minimal risk. We encourage governments to leverage value chain financing models—such as reverse factoring—to widen the reach of emergency funding through the crisis.
Engage chambers of commerce as focal points within the business community. Chambers of commerce can not only help governments by acting as intermediaries to ensure that MSMEs are aware of what funding resources are available—but they can also help to manage applications for financial support, simplifying the process and routing small businesses to the appropriate institutions.
Speed is of the essence when assisting MSMEs. Despite the commonly held view that most entrepreneurs get back on their feet after a company failure, available data indicates that some 60% of small businesses never reopen after a disaster. By tailoring the provision of financial support through the channels most used by MSMEs, governments can help to preserve the operations of these businesses and avert a worsening situation of bankruptcies and layoffs.
ICC is committed to supporting the development and implementation of these emergency support measures. Through our global network and engagement with other organisations,
we are working to identify and help develop mechanisms for ensuring financial support reaches small businesses as quickly and simply as possible.
We have mobilised to combat the public health challenges of this crisis, and we stand ready
to partner with you to address the socio-economic consequences and eventual recovery as we collectively respond to the SOS call to “Save Our SMEs”.
Yours sincerely,
John W.H. Denton AO
Secretary General
International Chamber of Commerce
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