STANDARD Bank Africa has said about US$140 billion is needed to fund small and medium industries (SMIs) in Sub-Saharan Africa for them to record sustainable growth.
Head of small and medium enterprise (SME) banking for the bank, which operates as Stanbic Bank in Zambia, Amrei Botha said African SMIs had continued to lack adequate capital for them to register sustainable growth.
Ms Botha said despite facing challenges such as poor infrastructure and an inadequately educated workforce, enterprises in Africa rate access to finance as the second biggest challenge after poor electricity supply and was prohibitive to their growth.
Speaking in Lusaka at an experts group meeting on financing SMIs in Africa organised by the United Nations Economic Commission for Africa (UNECA), Ms Botha said there were numerous challenges prohibiting the growth of SMEs in Africa.
"Lack of access to finance for SMEs continues to prohibit the growth of enterprises across the continent. For instance, SMEs cite access to finance to be important but getting access to finance quickly is even more critical.
"From a lender's perspective, SMEs always lack key requirements such as collateral, financial statements as well as a lack of credit bureau data. With a credit gap of $140 billion for enterprises in Africa, it's clear that collaboration between role players could help improve SMEs' access to finance," Ms Botha said.
She said the bank's response to this challenge had been to provide solutions to SMEs through the provision of an unsecured working capital product, namely quick loans requiring no collateral, financials or guarantees.
"We've streamlined the process for SMEs to access funding by using a business questionnaire to assist in evaluating risk.
"We have minimised application forms and requirements where a fast disbursement process is now in place for SMEs," Ms Botha said.
Stanbic Bank Zambia head of SME banking, Theresa Banda said the model for SME financing had been adopted successfully in Zambia through the recent introduction of the 'Tamanga' account.
More than 10,000 loans have been disbursed across Africa since Standard Bank introduced the quick loan while in Zambia more than K25 billion worth of loans had been given out since January 2012.