Sme finance investors in SME finance-related

Investors in SME finance-related equities saw increased volatility this week, with P/E ratios expanding to 14.6x. Sector specialists suggest short-term pullbacks could be buying opportunities as credit demand remains robust. The SME Finance Taskforce is chaired by the Centre for Finance, Innovation & Technology ( CFIT ) with support from an Open Banking Limited ( OBL ) secretariat. 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.” Data from recent exchange filings show SME finance firms increasing loan books by 7% YoY, a move that’s boosting EPS expectations and widening analyst coverage in the financial services sector.