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Fintechs Becoming The New Lines Of Credit

Small businesses have been suffering from the trade finance gap since the world plunged into the Covid-19 pandemic. And to save them from this problem, fintech has become the right platform to unlock access to finance.

The Fintech platform acts as a marketplace for small and medium enterprises to access trade receivable financing. According to the Co-founder and Chief Executive of Invoice Financing Marketplace Incomlend, Morgan Terigi, it is becoming a lucrative platform that allows investors to provide new credit lines to struggling business houses. 

Through fintech platforms like Incomlend, family offices, high-net-worth individuals, institutional investors are all starting to offer new credit lines to small businesses. The credit lines have become a lifesaver for small businesses as Covid-19 has increased the cost of the entire logistics chain. Businesses require extra money to accommodate basic logistical activities like providing transportation for their products. 

As we know, the territory of providing credit lines was previously manned by banks. But, it is being slowly taken over by Fintech platforms as these platforms have better agility than banks. Terigi says that a bank mostly looks at recourse just to the seller. However, now that the international supply chain is evolving, this approach is no longer applicable. 

Terigi firmly believes that banks will still be active like before - primarily as investors. A new development has slowly been implemented whereby the fintech industry providing trade finance will start to consolidate. Fintechs will share information to improve their offerings. Their only goal will be to provide better trade finances and act as a better alternative to banks for providing small businesses with all the credit they require. 





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