The Hidden Cost Of Delayed Funding

Small and medium-sized enterprises (SMEs) rely on fast funding for survival and growth. A 2024 Report on Employer Firms in the U.S. found that businesses sought funding for three main reasons: operating expenses, expansion, and opportunity ².

Yet in the Middle East and North Africa (MENA), they face staggering barriers to funding, receiving just 7% of total bank lending—the lowest in the world ³. Banks view SMEs as higher-risk and less profitable.

A study by the Shell Foundation and Citi Foundation revealed that over half of SMEs that apply for bank funding are denied, primarily due to short business histories (typically requiring 5-10 years), insufficient collateral (120%-150% of the finance value), and the absence of suitable guarantors ⁴.

Assessing and funding SME finance requires more time and resources, leading banks to prioritize corporates. For the few SMEs that secure finance, the interest rates range from 10%-14%, and the money often takes several months to arrive ⁴. 

Delayed funding leaves SMEs vulnerable to a host of hidden costs, from lost opportunities to financial distress and, in Bkam’s case, total collapse.