Alexander O. Onukwue
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Small and medium scale enterprises in Africa receive about $70bn of credit each year. But the International Finance Corporation estimates that the gap exceeds $300bn.
Why does the gap exist?
Michael Famoroti, chief economist at Stears gave two reasons during a recent TechCabal Live event on financing renewable energy companies in Africa.
First, there is an information problem.
Credit providers seem to lack enough information with which to assess the risk worthiness of many borrowers. This problem exists at the retail level as most bank customers who have tried to take personal loans will be aware.