May 26, 2026
Small and Medium Sized Businesses will always need support. Particularly, they will always need access to finance. However, there is only so much the public sector can do in that regard without it appearing like subsidies. And we all know how subsidies work out in the end. Those that receive subsidies will become dependent on it and it will be hard to take it back from them.
But, nonetheless, SMEs need the support. The private sector has to step in. there needs to be a specialised financing mechanism for SMEs from the financial sector. Special bonds need to be made and trade finance tools need to be expanded to incorporate domestic related trade and commercial systems.
For example, Letters of Credit for SMEs need to be standardized business tools for even the micro SMEs. This is just a piece of paper that covers an SME doing business. This can be done, because the same commercial banks will give principals of these SMEs full loans for things that have nothing to do with earning a return, like vacation loans and leisure loans.
This leads me to think that the professionals in the financial services sector don’t have the training and understanding of some of these tools and mechanisms to expand commerce.
Let’s put on our thinking caps and get outside of the box on these issues.