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Embedded finance companies are targeting SMEs and SMBs to expand their market share

Embedded finance companies are targeting SMEs and SMBs to expand their market share

Embedded finance companies are targeting SMEs and SMBs to expand their market share

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For any economy, small and medium-sized enterprises (SMEs) and small and medium-sized businesses (SMBs) play an important role in economic development. According to the International Finance Corporation (IFC) stated that there are nearly 65 million small businesses, or 40% of all SMEs in the world, who have unmet financing needs. Therefore, in order to tap the growing demand for financial products by SMBs and SMEs, fintech firms are introducing embedded finance products to target these segments.

In April 2022, United States-based blockchain development company, Alchemy launched the SME Lending SaaS Platform. It is a fully embedded financing software solution for commercial and small business lenders to automatically approve applicants through their integrated decision engine and servicing platform.

Notably, this system can manage lines of credit, and installment loans, together with revenue-based repayment structures. Additionally, the Alchemy lending system provides repayments, payment reminders, and also collections modules to help lenders to stay on top of SMEs ' portfolios and investments.

This software will help the lending companies to start offering loans to SMEs, which will automatically verify the small business's corporate information as well as the owner's personal identity. We can automatically verify all small business owners' personal identities to provide a high level of confidence that these applicants are using their identities. Additionally, Alchemy had partnered with Codat and Plaid to assess a company's cash flow and financial stability.

Similarly, in April 2022, fintech firm Raistone partnered with Mastercard to leverage Mastercard's virtual card technology for streamlining business-to-business (B2B) finance payments together with accelerating working capital for SMBs. Notably, the partnership of Raistone-Mastercard will provide convenient financial tools to the companies that need them most.

Through this partnership, the suppliers of these businesses get paid using virtual cards. Additionally, this partnership will be particularly beneficial for women- and minority business owners who will be able to join without enrollment fees through the end of the year.

The new Raistone virtual card will help to integrate into customer-facing software by the company's partners. Further, the card helps in improving cash flow through quicker payments, decreasing the pressures of operational works, and getting the suppliers paid in time. Consequently, this will help in advancing a more equitable and sustainable future for SMBs, particularly when liquidity is vital during volatile times.

In March 2022, Adyen, the global financial technology platform, announced to include embedded financial products in its range of product offerings. These products will enable platforms to provide tailored financial experiences for their users, such as small business owners or individual sellers. Additionally, these products will allow the platforms to unlock new revenue streams and help in increasing user loyalty.

Consequently, the companies with embedded finance experience are accelerating easier access to secure working capital, thus ensuring that businesses have adequate finances to manage and grow their business.

To know more and gain a deeper understanding of the global embedded finance market, click here.

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