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Bridging the SME finance gap in Asia

Asia / 05-06-15 / by
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Alternative lenders are using the latest technology to enter the Asian trade space. Liz Salecka asks whether they are likely to support or rival the traditional players.

The emergence of non-bank finance providers, harnessing the latest technologies to make of finance available to corporates and SMEs, is gathering pace in Asia.

Already considered almost a mainstream form of financing in many western markets, there are now more than 20 specialist technology platform-based providers of finance in the Asia Pacific region. The chief areas of operation are peer-to-peer lending, product-development-based crowdfunding, equity-based crowdfunding, merchant cash advances and invoice advances (trade finance).

The latest technologies are also being exploited by other non-bank players including Chinese e-commerce giant, which recently started offering an integrated trade finance service to users of its online marketplace. The move highlights the greater financial services ambitions of the Alibaba Group, whose affiliate Ant Financial Services Group, which encompasses Alipay, one of the world’s largest third-party payment platforms, is also harnessing internet technologies to offer financial services.

Supporting SMEs

According to Singapore-headquartered ApexPeak, a platform-based provider of trade finance in emerging markets, this model of financing looks set to play a critical role in Asia in the years to come.

“Post-financial crisis, the banking sector has been crippled with unending compliance updates, Basel III regulations, know-your-customer (KYC) rules, anti-money laundering (AML) rules and much, much more,” says Gakim Solomons, CEO and co-founder of ApexPeak, who ascribes to the common view that Basel III will restrict the amount of trade finance banks can offer.

“As a result, banks are all converging to funding the top 20% of corporates – typically the MNCs – as they all have good credit, leaving the bottom 80% of companies essentially underserved. Natural market forces dictate that other non-bank capital providers will step in and fill in the funding gap.”

Many Asian SMEs have also already seen their cashflows come under pressure as a result of less favourable payment terms from buyers. Lots of MNCs are working their supply chains hard and giving their upstream suppliers “poor” terms of payment, forcing them to look for expensive debt in order to fund their working capital cycle.

“Those who can retain their prices give generous terms of payment to their customers. But why should SMEs act as a bank for their MNC customers when they have already provided the goods and services?” asks Solomons.

Bridging the cashflow gaps experienced by SMEs is also at the heart of the Alibaba Group’s move into financial services.
Its new e-Credit Line service, which was launched in March in conjunction with e-lenders ezbob and iwoca, looks set to benefit both UK SME buyers, when making purchases of stock from Chinese suppliers trading via, and the Chinese suppliers themselves.

“The offering allows UK SMEs to apply for a line of credit, receive approval, and then use the line of credit to make multiple drawdowns to finance purchases,” Wei Duan,’s EMEA head of business development and marketing tells GTR.

Duan says the service also eliminates a certain amount of risk for Chinese suppliers who are often asked to manufacture and ship products before receiving full payment.

“Because the funds are disbursed directly to the suppliers in China, facilitated by either ezbob or iwoca, the suppliers receive their payment quickly with minimum delay,” she adds.

Alibaba affiliate Ant Financial is also looking to service the needs of SMEs – particularly in China. “Traditional banks provide bigger loans and SMEs in China have difficulties in applying for loans,” says Miranda Shek, international communications specialist at Ant Financial Services, pointing out that as her company is an online/mobile platform, which uses big data and cloud technologies, its operational costs are lower than traditional banks, putting it in a better position to provide smaller loans to SMEs.

Bank perspective

At Standard Chartered, Gautam Jain, managing director and global head of client access, says that growing demand for trade finance in Asia could mean smaller companies are left short.

“Asia is witnessing a lot of growth in the need for financing, which is not just in relation to east-to-west trade, but also intra-regional trade,” he says. “In my opinion, banks can satisfy these requirements – however, a lot will depend on the level of capital they have and this will determine how far they want to go into the SME sector. The SME sector is a part of many large supply chains – at the end of which you have corporates buying goods.”

Jain says that while Standard Chartered’s supply chain finance model looks at companies of all size, “there may be opportunities for alternative providers to service SMEs in isolation”.

It’s a sentiment shared at Deutsche Bank, where Shivkumar Seerapu, Asia Pacific head of trade finance, notes: “The movement of alternative providers into this space provides more options to borrowers as there are parts of the economy that global banks cannot serve easily. Most banks have a target client segment and are looking to serve companies that meet those definitions.”

Advantages over traditional players

Many alternative lenders believe they can offer their customers “a better user experience” than traditional players.
ApexPeak, which offers supply chain finance to buyers and invoice advance services to SMEs via a suite of digital platforms, argues that it has used technology to lower the cost of processing and achieve faster turnaround. It says that its customers are financed more quickly, and that its approval rates are higher.

“We can fund invoice discounting deals as quickly as five to seven days. The average turnaround for banks can be up to two to three months,” says Solomons. “Simplicity is also a key differentiation. Opening an account on an online lending platform can be a hassle-free process, while opening a new bank account can be a painful and time-consuming affair in itself.

“Business owners want to spend time on running their own businesses – not on their relationships with their bankers.”

Speed of service is also a critical part of the Alibaba-backed e-Credit Line service. iwoca, one of the two e-lenders involved, claims that it can provide UK buyers using the service with approval for a facility of up to £50,000 in five minutes when making purchases via The buyer has up to eight months to repay the finance.

At Deutsche Bank, Seerapu acknowledges that platform-based lenders and internet companies are successfully capitalising on the latest and most sophisticated technologies: “Technology is often a key part of their offering and they do invest in it and keep it up to date. Banks, by contrast, always face conflicting priorities when deciding the use of their investment dollars – should they put it into people, technology or another part of the business?”

He adds that as alternative providers are not regulated in the same way as banks, “they might be able to be more flexible and nimble in certain aspects, and service customers efficiently because there is less intensive documentation”. Banks are always required to complete detailed documentation.

However, Jain at Standard Chartered believes that this could be a drawback. “Large banks involved in trade finance have a moral obligation to meet rules on AML and trade sanctions. But with other types of organisations, questions remain about the level of regulation they adhere to, and the support they will provide to meeting these rules.”


As more digital financiers emerge and grow their businesses, new challenges to this model are anticipated, including ensuring they have access to significant capital resources. Already, there are strong suggestions that they will seek to work in closer relationships with banks.

While ApexPeak relies on multiple channels for finance including its own funding, third-party funds and bank debt, it also enters partnerships with traditional providers, particularly mid-sized Asian banks.

“It is very difficult to scale a fintech business alone,” says Solomons. “Ways in which one could partner with banks include accessing capital through co-financing lines, or through a securitisation vehicle which banks can either arrange and/or help fund.” Jain anticipates that a model based on both collaboration and competition between the two types of businesses
will emerge.

“The alternative finance provider model needs some rethinking, and banks do need to look at how they can work with them,” he says, pointing out that although banks have offered finance on an end-to-end basis by themselves in the past, partnerships with alternative providers could have benefits.

“At the moment, the impact of these organisations is quite minimal and some of them are quite small. However, more new players will emerge and they could well play a complementary role to banks in the trade finance market as well as providing competition.”
However, Seerapu believes “that banks must tread with caution”, saying that as banks become more regulated, they must be careful in where they invest, in all spheres. The rules also applies to banks investing in alternative financiers.


Securing business growth

As alternative finance providers seek to grow their businesses, ensuring access to new customers and understanding their target markets will also prove crucial. has achieved this by making trade finance available as an additional service to the companies using its online marketplace. Similar initiatives to make trade finance available to buyers based in countries other than the UK and US are anticipated in the future.

ApexPeak, meanwhile, which is marketplace-agnostic, is offering trade finance directly to both buyers and suppliers as well as to companies transacting on established e-invoicing networks.

It has also been able to boost its business levels by working in collaboration with other third-party platform providers of supply chain finance. It recently entered a partnership with global third-party solutions provider PrimeRevenue, under which it has agreed to fund invoices on the latter’s platform.

“PrimeRevenue always gets enquiries from the mid-market space. However, a lot of banks do not want to fund sub-investment grade companies,” says Gakim Solomons, CEO and co-founder.

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Established in 2002 and with offices in London and Singapore, Exporta Publishing & Events Ltd is the world’s leading trade and trade finance media company, offering information, news, events and services for companies and individuals involved in global trade.

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We also collect certain personal data from other group companies to whom you have given information through their websites (including, by way of example, Exporta Publishing & Events Ltd and subsidiaries, in accordance with the purposes listed below). Should we discover that any such personal data has been delivered to any of the Sites, we will remove that information as soon as possible.

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On some Sites, Exporta Publishing & Events Ltd collects personal data such as your name, job title, department, company, e-mail, phone, work and/or home address, in order to register you for access to certain content, subscriptions and events. In addition, we may also store information including IP address and page analytics, including information regarding what pages are accessed, by whom and when.

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3.      Marketing

Some of your personal data collected under paragraphs 1 and 2 above may be used by us to contact you by e-mail, telephone and/or post for sending information or promotional material on our products and/or services and/or those of our other group companies.
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4.      Profiling

We may analyse your personal information to create a profile of your interests and preferences so that we can contact you with information relevant to you.

5.      Cookies and similar technologies

All our Sites use cookies and similar technical tools to collect information about your access to the Site and the services we provide.

What is a cookie?

When you enter some sites, your computer will be issued with a cookie. Cookies are text files that identify your computer to servers. Cookies in themselves do not identify the individual user, just the computer used.

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Why do we use cookies?

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Most web browsers automatically accept cookies but, if you prefer, you can change your browser to prevent that, or to notify you each time a cookie is set. You can also learn more about cookies in general by visiting which includes additional useful information on cookies and how to block cookies using different types of browser. Please note however, that by blocking, deleting or turning off cookies used on the Site you may not be able to take full advantage of the Site.

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E-mail tracking is a method for monitoring the e-mail delivery to those subscribers who have opted-in to receive marketing e-mails from GTR, including GTR Africa, GTR Asia, GTR Americas, GTR Europe, GTR Mena, GTR eNews, Third party e-mails and GTR Ventures.

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So that we can better understand our users’ needs, we track responses, subscription behaviour and engagement to our e-mails – for example, to see which links are the most popular in newsletters. They enable us to understand the consumers journey through metrics including open rate, click-through rate, bounces and unsubscribes. Any other purposes for which Exporta Publishing & Events Ltd wishes to use your personal data will be notified to you and your personal data will not be used for any such purpose without obtaining your prior consent.

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To do this, we use pixel GIFs, also known as “pixel tags” – these are small image files that are placed within the body of our e-mail messages. When that image is downloaded from our web servers, the e-mail is recorded as being opened. By using some form of digitally time-stamped record to reveal the exact time and date that an e-mail was received or opened, as well the IP address of the recipient.

7.      Consents and opt-outs

You can give your consent to opt-out of all or any particular uses of your data as indicated above by:

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To turn cookies and similar technologies on and off, see the information in paragraph 5 above. Any questions regarding consents and opt-outs should be sent by e-mail to or by writing to Data Protection Officer at, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, United Kingdom. Alternatively, you can telephone our London headquarters at +44 (0) 20 8673 9666.

8.      Disclosures

Information collected at one Site may be shared between Exporta Publishing & Events Ltd and other group companies for the purposes listed above.

We may transfer, sell or assign any of the information described in this policy to third parties as a result of a sale, merger, consolidation, change of control, transfer of assets or reorganisation of our business.

9.      Public forums, message boards and blogs

Some of our Sites may have a message board, blogs or other facilities for user generated content available and users can participate in these facilities. Any information that is disclosed in these areas becomes public information and you should always be careful when deciding to disclose your personal information.

10.  Data outside the EEA

Services on the Internet are accessible globally so collection and transmission of personal data is not always limited to one country. Exporta Publishing & Events Ltd may transfer your personal data, for the above-listed purposes to other third parties, which may be located outside the European Economic Area and/or with a different level of personal data protection. However, when conducting transfers, we take all necessary steps to ensure that your data is treated reasonably, securely and in accordance with this Privacy Statement.

Who has access to your information?

Confidentiality and Security of Your Personal Data

We are committed to keeping the data you provide us secure and will take reasonable precautions to protect your personal data from loss, misuse or alteration.

However, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our Site; any transmission is at your own risk. Once we have received your information, we will use strict procedures and security features described above to try to prevent unauthorised access.

We have implemented information security policies, rules and technical measures to protect the personal data that we have under our control from:

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All our employees, contractors and data processors (i.e. those who process your personal data on our behalf, for the purposes listed above), who have access to, and are associated with the processing of your personal data, are obliged to keep the information confidential and not use it for any other purpose than to carry out the services they are performing for us.


Everyone who works for or with Exporta Publishing & Events Ltd has some responsibility for ensuring data is collected, stored and handled appropriately. Each team handling personal data must ensure that it is handled and processed in line with this policy and data protection principles. However, the following people have key areas of responsibility. The board of directors is ultimately responsible for ensuring that Exporta Publishing & Events Ltd meets its legal obligations.

Name of Data Controller

The Data Controller is Exporta Publishing & Events Ltd. Exporta Publishing & Events Ltd is subject to the UK Data Protection Act 1998 and is registered in the UK with the Information Commissioner`s Office.

How to access, update and erase your personal information

If you wish to know whether we are keeping personal data about you, or if you have an enquiry about our privacy policy or your personal data held by us, in relation to any of the Sites, you can contact the Data Protection Officer via:

  • By writing to this address: Data Protection Officer, Exporta Publishing & Events Ltd, 4 Hillgate Place, London, SW12 9ER, UK
  • Telephone: +44 (0) 20 8673 9666
  • E-mail:

Upon request, we will provide you with a readable copy of the personal data which we keep about you. We may require proof of your identity and may charge a small fee (not exceeding the statutory maximum fee that can be charged) to cover administration and postage.

Exporta Publishing & Events Ltd allows you to challenge the data that we hold about you and, where appropriate in accordance with applicable laws, you may have your personal information:

  • erased
  • rectified or amended
  • completed

Disclosing data for other reasons

In certain circumstances, the Data Protection Act allows personal data to be disclosed to law enforcement agencies without the consent of the data subject. Under these circumstances, Exporta Publishing & Events Ltd, will disclose requested data. However, the Data Controller will ensure the request is legitimate, seeking assistance from the board and from the company’s legal advisors where necessary.

Changes to this Privacy Statement

We will occasionally update this Privacy Statement to reflect new legislation or industry practice, group company changes and customer feedback. We encourage you to review this Privacy Statement periodically to be informed of how we are protecting your personal data.

Providing information

Exporta Publishing & Events Ltd aims to ensure that individuals are aware that their data is being processed, and that they understand.

  • How the data is being used
  • How to exercise their rights

To this end, the company has a privacy statement, setting out how data relating to individuals is used by the company. This is available on request and available on the company’s website.

Review of this policy

We keep this Policy under regular review. This Privacy Statement was last updated in April 2018.

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