Catalyzing Positive Change: business lending in the post-pandemic era
June-July 2020 – Trade Ledger™ white-paper “Catalyzing Positive Change: business lending in the post-pandemic era”
The COVID-19 pandemic has put businesses under immense strain. Their economic prospects, through no fault of their own, are bleak. Their cash flow runway is in many cases only a few weeks’ long. And, their outlook is precarious as they depend on financial institutions to make lending a truly efficient process – urgently.
It will be some time before we understand fully the repercussions of this crisis, but two things are already clear:
First, that the business lending infrastructure – just about good enough in normal conditions – is not fit for purpose in times of profound crisis, deepening the economic emergency affecting all of us.
Second, the speed of transition to the digital economy has gone from gradual to accelerating at full-speed – and not just for customers but for the entire banking and lending sector.
As a key lever of the financial ecosystem, business lending must push into the new era at full speed, reengineering its framework to help small and medium-sized enterprises (SMEs) – and the societies that depend on them for services and employment – to survive in the post-pandemic world.
Our concern is that this change is unlikely to happen fast enough to stop thousands of preventable bankruptcies and job losses.
However, even if this is regrettably the case, the silver lining is that this will not happen again. The pandemic will catalyze an upgrade to infrastructure that will boost lending and economic growth, in good and bad times, over the longer term.
In this report we re-imagine business lending and trade finance for the new world. We look at the how the business lending infrastructure proved to be unfit for purpose in a world that has accelerated at full-speed towards a digital economy.
We propose a way for the global trade finance infrastructure to re-engineer its framework to better help small and medium-sized enterprises (SMEs) – and the societies that depend on them for services and employment. A way forward that does not make trade-offs between quality and scale.
And we’ve taken the necessary steps to bring the ecosystem together and orchestrate the network intelligence required to enable this new world. Meet the SME Fintech Taskforce