It is the small and medium enterprises that form the backbone of economies everywhere in the world, but often the scale-up and growth of these businesses are stagnated by the fragmented financial systems that they experience.
There have been fintech innovations that have strived to tackle these challenges, especially in the last ten years, but even this transition from legacy banking to the agile user-centric solutions we all take for granted today has not been easy.
As a product manager who has spearheaded some of the most innovative initiatives wholly focused on accelerating the growth of SMEs, I have come to understand that this evolution can only be driven by relentless market research, empathy for user pain points, and strategic alignment of technology with business outcomes.
Just two decades ago, maybe in the early 2000s, financial institutions viewed SMEs as high-risk ventures and only routinely offered them inflexible loan terms, or when the loan facility was adequate, the approval process was slow and often would take months before the loans were disbursed.
There was very minimal support for managing the cash flows for the SMEs, so entrepreneurs had to resort to accessing informal credit networks with unbelievably high interest rates and all these stifled scalability and actionable growth. Something had to give, so it wasn’t a surprise with the advent of fintech startups providing solutions.
These fintech startups begun by digitizing basic processes like invoicing or payroll, but these tools operated in silos, and truly failed to address systemic challenges. It was the rise of embedded finance that changed the trajectory as financial services became seamlessly integrated into platforms that entrepreneurs and SMEs already trusted.
At Anchor, this meant embedding lending, payments, and analytics directly into e-commerce and logistics ecosystems, reducing friction and democratizing access.
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It is critical to be able to understand the needs of the average SMEs. These SMEs sometimes require more than access to faster loans, which just might be holistic tools to manage uncertainties. At Anchor, we had to develop an AI-driven lending platform, and we needed real-time data using interviews. These user interviews revealed that entrepreneurs actually valued transparency as much as they valued capital.
Knowing this led Anchor to design an interactive dashboard that provided real-time cash flow forecasts and risk assessments as well as streamlined loan applications. Anchor got a 45% increase in the uptakes of our loan applications as well as a 30% reduction in default rates within the first year.
Brands that leverage data, particularly in this age, will evolve at a spectacular rate. My work at Anchor is done by leveraging SQL and Power BI, and this simplifies the process of identifying high-potential SMEs by analysing transactional patterns.
While this may sound easy to do, it is often overlooked by traditional credit models. Machine learning algorithms processed alternative data, such as social media engagement and supply chain reliability, to score creditworthiness, enabling us to extend loans to 15,000+ previously excluded businesses. This data-driven approach wasn’t just about risk mitigation; it empowered SMEs to benchmark their performance against industry standards, fostering a culture of continuous improvement.
Looking ahead, the next frontier for SME fintech lies in “hyper-personalization”. The one-size-fits-all model is obsolete. Future solutions will leverage AI to offer dynamic financial products—think insurance premiums adjusted in real-time based on market volatility or microloans that auto-renew based on seasonal cash flow patterns. At Anchor, piloting such tools has already boosted customer retention by 35%, proving that adaptability is key to loyalty.
I believe the lesson is quite clear for product managers, as success at our jobs can often rely on marrying technical prowess with relentless user advocacy. Looking at the past and envisioning the future, we can see that just providing tools that are cheaper and faster is not enough to scale these SMEs, and sometimes, product managers must aim to design ecosystems that empower SMEs to thrive and scale.
It is the brands that embrace evolution by prioritizing empathy and transparency in their attempts to transform budding SMEs from underserved entities into engines of global economic growth.
Razzaq Onotu is a fintech product leader with expertise in scaling digital solutions for SMEs. His work at Anchor and Access Bank PLC has driven over $150M in revenue impact, blending data-driven strategies with user-centric innovation.
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