Over the past few years, businesses around the world have endured an unprecedented challenge in the form of the Covid-19 pandemic. As taxing as the outbreak may have been, however, many of those affected have at least enjoyed some degree of assistance through the numerous government-backed pandemic relief funds established in response.
In Asia-Pacific (APAC), a significant amount of this support was aimed directly at small and medium-sized enterprises (SMEs). From China's ¥400bn (approximately $2.8bn) lending fund and India's ₹3 trillion (approximately $37bn) collateral-free loan scheme, through to Singapore's secured loan programme, governments across the region rallied around the SME sector with a variety of low-cost, long term financing packages.
Now, a new threat to prosperity looms. As some APAC economies begin to struggle and both inflation and interest rates rise, a period of pronounced fiscal tightening looks sure to follow. With aid, like that seen during the pandemic, unlikely to arrive, and banks unwilling to lend in the same capacity that they have in recent times, many businesses will undoubtedly look to alternative means of funding – receivables finance, factoring (debtor finance) or supply chain finance (SCF) among them.
While this environment presents a significant opportunity for alternative finance specialists to win new business and further support their existing customers, it is also one that has the potential to greatly increase their exposure to fraud.
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