The Challenge: How can we re-imagine solutions to finance the growth of SMEs and trade to unlock prosperity for the world’s communities?
Sustainable Development Goal 9 (SDG 9) is based on three interconnected pillars: infrastructure, industry and innovation. How can we re-imagine these as facilitators of growth and development in a connected world?
80% of world trade is believed to be intermediated through global supply chains. 90% of business worldwide is driven by small and medium sized enterprises, in turn driving up to 60% of employment. 80% of global merchandise annual trade flows rely on financing from financial institutions. Financial services are the lifeblood of commerce, commerce in turn driven by entrepreneurs and small businesses.
In developing countries in particular, one of the main barriers to the growth of SMEs is a lack of access to finance, including trade finance; limiting the mobilisation of resources, growth in prosperity and flourishing of communities. Supporting SMEs and trade worldwide and in particular developing markets, plays a key role in helping to advance SDG 9.
At the same time, traditional models of banking and financial services are changing, with the potential to fundamentally transform. This transformation is being driven by innovation and technology in an ever more connected world; already changing the way we perceive communities, and certainly the way we should think about financial services.
How can innovation support new ways of banking - from intermediating financing to information, connection and trust (re-broadening the definition of financial services) - to provide more businesses and communities with the means to grow, more quickly? How can we collaborate - on ideas, technology, across industries and borders to serve those who cannot easily access support from banks and financial institutions?
Sonika, who spent the last decade as a software engineer at the Microsoft Innovation Center in Nepal, went on to co-found Aeloi- a fintech social enterprise specialising in tracing climate impact finance.
Aeloi aims to become the premier marketplace to invest in green grassroots entrepreneurs. Its software tracks impact sector funds – including from public/private sector, carbon offset credits – using digital tokens. Investments are locked into the system, making sure all funding is for assets critical for small businesses.
Aeloi’s target clients are informal sector micro-entrepreneurs who do not have any collateral or credit history, so they borrow at high-interest rates. Aeloi helps them access tailored loan products, increase business income, and automated personalised services, such as business skills support.
Lead2030 will enable Aeoli to expand to 12,000 borrowers and vendors next year.