Benefits of Financial Technologies to SMEs
This includes digitizing processes that were previously handled with lots of human interaction and exchange of Real money. Financial technology is the real driving force that transforms business potentials to unleash a new era of business advancement, competition, and innovations.
To many individuals, Financial Technology is just all about digitizing money, however, it is far beyond that. Businesses nowadays have structured access to unlimited data with the introduction of sophisticated algorithms which can be quickly transformed into business solutions.
Financial Technology offers effective and efficient solutions to small scale businesses (SMEs) and provides them with increased access to many diverse business funding options. Financial Technology can be propelled to the needs of small businesses like marketplace lending, invoice finance, online drop shipping, finance and many more.
Innovative financial Technology Solution had overtime assisted small businesses by providing them with improved working capital management, better cash flow, and secured funding access. It also helps SMEs through improved payment systems, customers and sellers networking, invoicing and collections, among other benefits. The system also allows people to conduct transactions at their comfort zones through the use of mobile phones, PC or tablets with improved efficiency and better customer experience. This is made possible by utilizing data aggregates which can synchronize financial data from various sources and integrate diverse bank accounts from several financial institutions, which in turn reduces compliance costs in the business.
BENEFITS OF FINANCIAL TECHNOLOGY TO SMEs in NIGERIA
The proliferation of smartphones has massively changed the ways small businesses are executed in Nigeria. Consumers can now check from varieties of products online, select their choice, make payment and get them at their doorsteps. This has massively changed the behaviour of consumers and had helped small business to make headway overtime.
The gradual integration of financial technology has overtime given the small and medium businesses several opportunities to showcase their products and services through the introduction of E-Commerce websites, social media advertisements and similar avenues.
Financial Technology had overtime helped SMEs in Nigeria in several ways, among which will be explained below:
1. Banking
In the past, small and medium enterprises were more susceptible to financial risks such as robbery and bad credit situation. With the acceleration of Financial Technology into all facets of the society, the SMEs got a facelift which greatly reduced the occurrence of the aforementioned dangers since customers can now make payments via a direct transfer with a USSD code, a bank app or opt for the POS.
2. E-commerce
E-Commerce is also one of the media that experienced increased usage among Nigerians as a result of the many reliable payment options which were birthed by technology. you can select any of your desired products from anywhere across the world, make secured payments and get your order delivered at the appropriate time. This has over time improved sales for the small and medium business owner who adopted this medium as they can always showcase their products and services and persuade buyers to purchase without necessarily worrying about the medium of payment.
3. Lending
Financial Technology has ushered the growth of alternative lenders that offer loans to both bigwigs and smaller investors. These loans are faster, more convenient and have competitive interested rates which are economically better than that offered by the conventional banks. Private lenders like Paylater, Quickcheck, etc continue to render hundreds of Millions as loans to Nigerian SME operators without boring them with bureaucratic red-tapism.
4. Financial Management
Again, Financial Technology has over time changed the ways and manners SME’s manage their finances. Business finances can now be recorded, tracked and managed through digital financial solutions. For example, Small Businesses use Piggybanks platform for saving, InvoiceNG for invoicing, Kliqr for expense management, etc. The aforementioned have not only replaced the traditional method of executing financial management tasks, but they have also proven to be more reliable and efficient.
Conclusion
The proliferation of Financial Technology has opened up a lot of opportunities for small businesses. It has exposed them to facilities which used to be exclusive to large corporations. Forward-Thinking Entrepreneurs are encouraged to keep up-to-date with Financial Technology because it contributes a lot to business growth at this age. Being aware of the latest technology and development will always benefit SMEs.
Benefits of Financial Technologies to SMEs