African SMEs will be able to rapidly achieve international standards with digitisation, enabling them to compete on and access international markets.
This message was the key plank of the presentation by Nana Dwemoh Benneh, CEO of the Universal Merchant Bank (UMB), during the 4th Strategic Leaders’ Summit 2022 held in Kampala, Uganda.
The summit largely deliberated on how African start-ups and SMEs in the African Continental Free Trade Area (AfCFTA) era can innovate, digitalise, and transform to become global players with a specific panel discussion on how banks could help African SMEs access funding.
According to the World Bank and other think-tanks, SMEs account for over 70% of economic activity in sub-Saharan Africa (SSA).
A key trend in the development of SMEs worldwide is the increasing trend to enterprises operating in or powered by what the World Economic Forum has termed the 4th Industrial Revolution largely driven by four specific technological developments that are, big data analytics, AI and automation, cloud technology and high-speed mobile Internet.
UMB presented a uniquely indigenous African Banking view of the challenge.
Nana Dwemoh Benneh, presenting for the Bank, noted “digitisation represents perhaps the biggest all-encompassing game-changer for African SMEs in a generation”.
“We know harnessing technology allows SMEs to leapfrog, leading to economic development. We saw this happen with the Asian economies in the last century. We estimate that a similar effect can be achieved with digitisation. Digitisation is allowing African SMEs to accelerate their adoption of quality-control standards and speed up their routes-to-market.
“In finance, digitisation allows banks to solve challenges that hampered extending funding to SMEs, especially as regards data. Digitisation allows us to access data that improves the credit process, for instance, allowing us to extend the right credit to customers due to an enhanced KYC regime. At UMB, for instance, we are pioneering using digital inventory systems as the basis for an inventory-backed credit line for SMEs here in Ghana.”
In further comments during the panel, Nana Dwemoh Benneh noted: “UMB’s analysis supports the view that one of the most viable start-up ecosystems for the Ghanaian and African economy is the technology/fintech ecosystem. The evidence from markets like Nigeria where start-ups like OPAY and Flutterwave have raised over USD$200million in less than four years makes the point. We believe banks collaborating with fintech will be beneficial to SMEs as the fintech companies are delivering innovation of financial products to the SME sector.”
On the panel with Nana Dwemoh Benneh were Managing Partner of Chanzo Capital Eric Osiakwan, Executive Director at HFB Peace Ayebazibwe Kabunga, Ecobank’s Head Legal & Compliance Patricia Omallah, Chief Commercial Officer for Roke Telkom Michael Mukasa and Director/co-owner of NFT Consult Badru Ntege.
The 4th Strategic Leaders’ Summit 2022 is an initiative of the Human Capital International in partnership with Shared Value Africa Initiative.