How does your proposed innovation leverage public intervention in catalyzing private SME finance?
The leverage is in the fact that, public funds needed for SME financing will almost be freed from such task by the up-front colateral pooling. Instead of public finance efforts to help SME's which sometimes ends on political corridors and never get their monies paid back, our plan protects public finance from such losses.
What barriers does your proposed solution address?
Lack of collateral, Lack of financial capacity, Lack of SME access to skills / knowledge / markets, Unavailability of financial products tailored to SME needs, Lack of institutional capacity of financial intermediaries, High transaction costs for financial intermediaries to serve SMEs, General barriers to SME development related to investment climate, Lack of financing to women entrepreneurs.
If you checked any of these barriers, describe how your solution addresses them
1. Lack of Collateral: The pooling of very small amounts of money to borrow for SME's removes the individual lack
2. Lack of Financial Capacity: There seem to be a lack of financial capacity for SME's. Each time our people need funds, only a small number of people are served, even on political basis
3. Lack of SME access to skills / knowledge / markets: We intend giving those who come into our fold some support of training in the following areas; product identification, production planning and marketing plus a business set up organization.
4. Unavailability of financial products tailored to SME needs: Our banks don't seem to know of the existence of the SME's
5. Lack of institutional capacity of financial intermediaries: Those who come up to give SME's help don't seem to have time for the SME's. The banks simply have no time for small people. we will be devoted.
6. High transaction costs for financial intermediaries to serve SMEs: Bank charges are not understood by the SME borrowers. We know it is a necessary evil but since the people don't understand, we'll cushion them from the cure.
7. General barriers to SME development related to investment climate: As we have noted, the people have something to do, but for fund
8. Lack of financing to women entrepreneurs: Because the bulk of SME's are women, not very well educated, they don't even know how to go for fund. They will know us.