(27 February 2018) – Small and medium-sized enterprises (SMEs) are increasingly turning to alternative sources of financing, while new bank lending is declining in a number of countries.
Many SMEs remain over-reliant on bank credit, however, and the take-up of instruments other than straight debt varies greatly from one country to another, according to a new OECD report.
‘Financing SMEs and Entrepreneurs 2018’ shows that a rise in venture capital investments and private debt to SMEs occurred in most participating countries in 2016, along with rapid growth in peer-to-peer lending, equity crowdfunding and invoice trading.
The use of online alternative finance was especially high in China, the United Kingdom and the United States.
Leasing, hire-purchase activities, factoring and invoice discounting, which are based on asset value rather than credit standing, also rose for a second consecutive year.