AI Is Transforming Small Business Finance, Closing Global Funding Gap
From Forbes:
Small and Medium Enterprises (SMEs) play a major role in most economies, particularly in developing countries. In fact, SMEs contribute up to 40% of GDP in emerging economies, according to the World Bank. However, access to finance is a key constraint to SME growth.
The unmet financing needs of small and medium-sized enterprises (SMEs) in emerging markets is estimated to be $5 trillion, according to the World Bank and the International Finance Corporation (IFC). This gap limits the ability of these businesses to grow, create jobs, and build resilience in their economies.
Fortunately, AI is playing a transformative role in small businesses finance because of the technology’s ability to quickly and efficiently assess a borrower’s credit history and current financial situation, thereby speeding up the approval process, while minimizing lender risk. Further, AI helps match SMEs with financing products including term loans, SBA loans, business lines of credit and revenue-based financing that best fit their situation.