The PAYTECH Book

The Rise of a Super-Correspondent Banking Network

By Anders la Cour

Co-Founder and Chief Executive Officer, Banking Circle

Financial exclusion is no longer limited to vulnerable consumers; it is fast becoming an increasing concern for businesses too. Post-recession business lending is a challenging market, and small and medium enterprises (SMEs) often face a tough battle for finance. With banks closing branches across the country, businesses are more restricted in their access to financial experts and this is having an impact on their ability to borrow.

When we spoke to over 500 heads of finance for SMEs in 2018, we found that almost all (92.5%) have needed to access additional finance within the past five years, and just 13.5% had a positive experience when doing so.

Without additional funding, 24.6% of the SMEs we surveyed would have to let employees go, and 13.3% believe this would ultimately lead to the failure of the business. With SMEs making up 99.9% of private businesses and employing 60% of the UK workforce,¹ this is a dangerous situation. If these businesses cannot access the necessary finance, over 16 million people are at risk of unemployment if their company struggles or becomes one of the 90% of startups that don’t make it to their fourth anniversary.²

The importance of financial inclusion, and the size of financial exclusion as a global problem, cannot and must not be underestimated. The banking and payments industries must work together to improve the prospects ...