Tag Archive: Alternative Finance

Dealing With Challenges In The Fintech Sector-Is Fintech Over-Hyped?

By now, we all know that there is a revolution in finance and technology.  It’s no secret that the Fintech industry is booming and the banking sectors all over the world are changing. Personally, i have to say that so far, i consider myself a happy consumer. The idea of making payments right from my smartphone, (thanks to the mobile payment platforms) has indeed made my life easier.

The talk about Fintech is not just about the bitcoins, the latest ‘hot’ startups in this sector or even the billion dollars invested in this space. It’s much more than that. (Read on)

Not long ago, i came across an article describing how ‘Fintech as a label is becoming increasingly problematic’. The article is about clearing the confusion about what ‘Fintech’ really is. It discusses the importance of understanding and interpretation of the term ‘Fintech’. It doesn’t just mean startups in the financial services sector. It also comes in other varieties around the world, such as alternative forms of finances/ lending. (Read on here  and here)

Then there are concerns about Fintech Companies being overvalued. According to a report by Investment bank GP Bullhound, there are now 39 Fintech companies valued at over a billion dollars. (Who are the global Fintech leaders? Read on)

With that in mind, another interesting question i believe is worth asking is- Whether or not Fintech is overhyped? And how does one know? I came across an informative article on the LSE’s (London School of Economic and Polical Science) blog which describes 7 ways to identify Fintech technologies that do not deserve the hype.  With consumer orientation forming the basis of a large number of  Fintech firms,  it makes sense to ask ‘What works for consumers and what doesn’t?’ (Read on)

The Secret behind Germany’s SMEs Growth, The Germany “Mittlestand”, SMEs Access to Finance

-Like elsewhere in many parts of the world, in Germany the small and medium-sized enterprises (SMEs) form the backbone of the German economy. According to KfW (Kreditanstalt für Wiederaufbau), there are approximately 3.6 million SMEs and they offer employment to more than 60% percent to the working population. (See a summary of further information on  “THE SME SECTOR IN GERMANY” by KfW) .

-Who are the Germany “Mittlestand” and what makes them stand out?  I came across an article titled ‘Introducing the German Mittlestand’ -The article describes 8 facts about the Germany’s ‘Mittlestand’ and what makes them productive. (Read on at Make it in Germany)

-What is the secret of SME growth in Germany and what can the world learn from them? An article by the Telegraph.co.uk describes a broader picture behind the success and growth of the Germany’s SME’s and how they compare with SMEs in the UK and elsewhere in the world. One of the important issues addressed in the article, is the Germany SME access to business financing which is hugely provided by institutions such as the KfW Development Bank among others.

Limited access to SME Financing is a global  problem. I’ve listened to small business owners talk about their frustrations in their businesses. Most of them talk about the difficulties they face while trying to raise business funds through bank financing. According to research, a large number of SMEs are forced to seek alternative methods of business financing. Some raise finances through external sources such family and friends due to the fact that they have limited access to bank loans. A separate article by (OECD) The Organisation for Economic Co-operation and Development, highlights other forms of alternative financing and the importance of having broad range of financing instruments available to SMEs besides just bank financing. Easy access to alternative finances as is important to in order to continuously improve on the  performance of SMEs,  innovation, employment and fuel growth, ( Read the full OECD report here)

Still on alternative SME Financing, are slowly taking a bold step to help improve access to financial Services around the world. Examples of such companies include  Village Capital and PayPal . According to Paypal, the main is to “…support social impact innovators who are making financial services more accessible to low-income individuals, families and small businesses…” (Read on here)