SMEs have always been the most vital cog of global economic growth[1]. In the US, SMEs contributed to more than two-thirds of net new private sector jobs over the past few decades. Also, SMEs account for 97% of the total identified imports as well as exports in the US.
Apart from being the lifeline of manufacturing, retail, agriculture, and other key industries, SMEs contribute massively to a country’s international trade. SMEs are also the largest contributors to company registrations in any economy and represent a massive pool of opportunities as the creamiest layer of companies from this segment, more often than not, go on to become pioneers in their areas. In fact, despite all these contributions to the evolution of the next-gen business landscape, SMEs have never got what they deserved.
After the global financial crisis, SMEs bore the brunt of reducing risk appetite of banks, resulting in complexities in access to credit essential for their growth[2]. Then, with the emergence of the mobile-first economy[3], the emergence of FinTech business models and the intermittent threat of disintermediation pushed banks to focus massively on the consumer segment with their front-end innovations. The emergence of various business models designed around making the retail banking experience seamless – talk about PFM, instant payments, wallets, recommendations, chatbots and so on – substantiates this fact.
Traditionally, SMEs already faced challenges in availing banking services, with the bank innovations being inclined towards large corporates due to their high profitability and large loan books. SMEs always had to make do with inefficient, limited capabilities of banking, which never really addressed some of the key pain points that they
