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Trust Machine initiative aims to bridge SME funding gap
INASTRA AND ITS customers
F are set to positively impact over nine million lives around the world , through technology and collaboration . One of the focuses for Finastra is the bridging of the SME funding gap . Finastra is piloting a revolutionary microfinance initiative , Trust Machine , in Kenya .
Together with partners in data , financial literacy , Blockchain and scenario modelling , the resulting loan and balance sheet optimisation solution aims to reduce the US $ 19bn funding gap by 1 % in the country which could potentially create 50,000 new jobs to encourage sustainable economic growth .
We spoke to Arnaud Picut , Senior Director , Risk Management , APAC , Finastra , to find out more about the initiative and how SMEs are set to benefit .
Can you tell us more about the idea behind the initiative – when did it launch and what prompted the idea ?
The idea began during a series of Design Thinking sessions that we ran with development banks and microfinance customers back in 2019 . They were run to explore ways in which we could bridge the SME funding gap by orchestrating the entire financing chain from investor to local bank to SME to citizens – in a trustable , efficient and transparent way – and apply this to specific industry sector value chains .
SME funding is a multi-faceted challenge that goes beyond simply access to financial services and we unpicked the multiple dependencies ; lack of financial education , lack of credit history , market data scarcity – all of the factors that made small loans either too expensive or not suitable for borrowers .
The aim was to find a way to balance the loan between lender and borrowers and find a way to make it work for both sides . From there , we identified FinTechs and universities that we could work with , such as the University of Leeds which , with our investment , was able to build synthetic data generator capabilities , to fill the gaps in the optimum funding process .
We began the programme as a CSR initiative , but without sustained investment , CSR projects tend to be finite . So , we focused on
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THE AIM WAS TO FIND A WAY TO BALANCE THE LOAN BETWEEN LENDER AND BORROWERS AND FIND A WAY TO MAKE IT WORK FOR BOTH SIDES .
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