Sme finance the SME finance segment is attracting

The SME finance segment is attracting private equity interest, with multiple acquisitions pushing valuations higher across regional exchanges. The acquisition was financed without a capital increase, reflecting Teylor’s strong core business. The company is receiving legal and integration support from White & Case and A&O Shearman, with Rothschild & Co advising on strategic initiatives. One obvious issue is that higher interest rates have raised the hurdle for borrowers. Businesses need bigger returns to justify borrowing, and raising prices only gets them so far. “At some point, consumers just don’t follow you,” says Francis Malige, managing director, head of financial institutions business group at the EBRD. “When interest rates are very high and inflation is very high, SMEs either lose margins or they lose customers. That’s the dilemma they face.” Institutional buying in SME finance-oriented funds jumped 9% over the past two weeks, fueled by optimistic cash flow projections and resilient net interest margins.