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Roles of Small and Medium Enterprises (SMEs)

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Small and Medium Enterprises (SMEs) play a major role in most economies, particularly in developing countries. SMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development. They represent about 90% of businesses and more than 50% of employment worldwide. Formal SMEs contribute up to 40% of national income (GDP) in emerging economies. These numbers are significantly higher when informal SMEs are included.  According to our estimates, 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world. In emerging markets, most formal jobs are generated by SMEs, which create 7 out of 10 jobs. However, access to finance is a key constraint to SME growth, it is the second most cited obstacle facing SMEs to grow their businesses in emerging markets and developing countries.

 

SMEs are less likely to be able to obtain bank loans than large firms; instead, they rely on internal funds, or cash from friends and family, to launch and initially run their enterprises. The International Finance Corporation (IFC) estimates that 65 million firms, or 40% of formal micro, small and medium enterprises (MSMEs) in developing countries, have an unmet financing need of $5.2 trillion every year, which is equivalent to 1.4 times the current level of the global MSME lending. East Asia And Pacific accounts for the largest share (46%) of the total global finance gap and is followed by Latin America and the Caribbean (23%) and Europe and Central Asia (15%). The gap volume varies considerably region to region. Latin America and the Caribbean and the Middle East and North Africa regions, in particular, have the highest proportion of the finance gap compared to potential demand, measured at 87% and 88%, respectively. About half of formal SMEs don’t have access to formal credit. The financing gap is even larger when micro and informal enterprises are taken into account.

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Services

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1. Microloans (Small Loans)

  • Individual Loans: Small loans granted to individuals for personal or entrepreneurial purposes, such as starting or expanding a business, education, or housing. These loans often have low-interest rates and flexible repayment terms.
  • Group Loans: Loans provided to a group of people (usually with collective responsibility for repayment). This model is commonly used in microfinance and is particularly popular with women’s groups or rural communities.
  • Business Loans: Small loans specifically designed to help small businesses access capital for working capital, equipment, or expansion.
  • Agricultural Loans: Loans aimed at farmers or individuals involved in agriculture to support them in purchasing seeds, fertilizers, equipment, or funding agricultural activities.
  • Emergency Loans: Quick loans given to individuals during emergencies (e.g., health issues, family crises, or natural disasters).

2. Savings Accounts

  • Basic Savings Accounts: These accounts are designed for low-income individuals to help them save money securely with minimal requirements. They may not require a minimum balance and often come with no fees.
  • Micro-Savings Accounts: Savings products that allow clients to make small, frequent deposits, catering to those with irregular income or small amounts to save.
  • Targeted Savings Accounts: Specialized accounts to help clients save for specific goals, such as school fees, housing, or business investment.

3. Insurance Products (Micro-Insurance)

  • Health Insurance: Affordable health coverage options that provide basic medical care and protect clients against financial risks due to health emergencies.
  • Life Insurance: Simple life insurance products designed to provide financial protection to a family in case of the death of the policyholder.
  • Crop Insurance: Insurance for farmers to cover losses from crop failure due to natural disasters, pests, or other unforeseen events.
  • Property Insurance: Basic coverage for personal or business property, helping clients protect against loss due to theft, fire, or damage.

4. Money Transfer and Payment Services

  • Remittance Services: Starliteml institutions often facilitate money transfers, allowing individuals to send and receive money, especially in areas without banking infrastructure.
  • Utility Bill Payments: Starliteml institutions allow clients to pay their electricity, water, and phone bills directly through their accounts, increasing convenience.
  • Mobile Money Transfers: Mobile banking and digital wallets to send, receive, and store money on mobile phones, making it easier for people in remote areas to access financial services.

5. Financial Education and Literacy

  • Financial Literacy Programs: Educational initiatives that teach clients how to manage money, save, invest, budget, and understand loans and interest rates.
  • Business Training: Starliteml offer training programs to help clients enhance their entrepreneurial skills, including marketing, accounting, and customer service.
  • Debt Management Advice: Helping borrowers manage their debt effectively, avoid over-borrowing, and ensure that they can repay their loans without falling into financial distress.

6. Investment Products

  • Micro-Investment Programs: Opportunities for clients to invest small amounts in projects or businesses. This allows low-income individuals to start building wealth, even in small increments.
  • Community Investment: Investment programs that pool resources from a group of clients to fund a community project or business venture, such as cooperative ventures or local infrastructure projects.

7. Business Development Services

  • Business Advisory Services: We Support to small business owners in improving their business plans, marketing strategies, accounting systems, and management skills.
  • Access to Market: We assist small business owners in finding markets for their goods and services, helping them expand their reach and customer base.

8. Mobile and Digital Banking

  • Mobile Banking Services: These allow clients to access their accounts, apply for loans, and make transactions directly from their mobile phones, which is especially important in rural and underserved areas.
  • Online Loan Applications: The ability for clients to apply for loans online through digital platforms, which increases convenience and accessibility.
  • Digital Wallets: Virtual wallets that enable clients to store, send, and receive money digitally, and sometimes make purchases or pay for services.

9. Flexible Loan Repayment Terms

  • Grace Periods:We offer clients a grace period before starting loan repayments, especially for agricultural loans that depend on seasonal income.
  • Flexible Repayment Schedules: Loan repayment terms that align with the client’s income cycle or business revenue, helping make repayments manageable.

10. Cooperative and Group Lending

  • Cooperative Loans: We offer services to cooperatives or self-help groups, which enable people to pool their resources to take larger loans together and share the responsibility of repayment.
  • Joint Liability Lending: In group lending, the group collectively guarantees the loan repayment, which reduces risk for the lender and builds trust within the community.
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Portfolio

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  • To be a leading provider of sustainable financial services that promote economic growth and poverty alleviation.
  • To provide accessible and affordable financial products to individuals, families, and small businesses in underserved areas.