Zvilo, a London-headquartered digital lending platform founded in 2019, has signed a Memorandum of Understanding (MoU) with American payments giant Mastercard “to revolutionize Small and Medium-sized Enterprise (SME) lending in the Balkans”.
The start-up
Startup
A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is created by at least one or more entrepreneurs. These seek capital as a means to bypass a limited availability of capital and combat high costs. This is why startups seek funding from funding rounds, crowdfunding, venture capitalists, financial institutions, or other sources. What Makes Startups Successful?Given the fact that most startups fail, the first three years of a startup are critical which is why startup founders require capital for talent acquisition, creating effective business models and plans.In parallel it is important to provide proof-of-concept for the long-term through an established user base and consistent revenue streams. Many startups use seed funding, which occurs during the first stage of funding rounds, where fundraised capital is used to conduct market research and product or service development.Sometimes, startups go through an acquisition process, where they merge larger companies competing in a similar industry. Companies that generate less than $20 million annually, possess less than 80 employees, and are primarily controlled by the founding entrepreneur(s) are generally classified as startups. Today, some of the world’s most successful companies started as startups, such as Facebook, Uber, and SpaceX to name a few.
A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is created by at least one or more entrepreneurs. These seek capital as a means to bypass a limited availability of capital and combat high costs. This is why startups seek funding from funding rounds, crowdfunding, venture capitalists, financial institutions, or other sources. What Makes Startups Successful?Given the fact that most startups fail, the first three years of a startup are critical which is why startup founders require capital for talent acquisition, creating effective business models and plans.In parallel it is important to provide proof-of-concept for the long-term through an established user base and consistent revenue streams. Many startups use seed funding, which occurs during the first stage of funding rounds, where fundraised capital is used to conduct market research and product or service development.Sometimes, startups go through an acquisition process, where they merge larger companies competing in a similar industry. Companies that generate less than $20 million annually, possess less than 80 employees, and are primarily controlled by the founding entrepreneur(s) are generally classified as startups. Today, some of the world’s most successful companies started as startups, such as Facebook, Uber, and SpaceX to name a few.
Read this Term in a statement on Wednesday said the collaboration will support its plans to transform the banking sector in the Balkans “by enabling access to short-term working capital across different value chains.”
“The partnership will focus on generating digital financial products within the trade sector, reducing barriers for SMEs wanting to access working capital,” Zvilo said.
At a future date, both companies will also work together to launch a digital wallet for SMEs. The wallet will be equipped with savings, payments
Payments
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
Read this Term, and other functionalities, Zvilo noted.
The startup’s partnership follows its recent signing of a debt facility of up to €50m with a London-based alternative asset management company to enable Zvilo scale its SME lending programme in the Balkans.
With the new MoU with Mastercard, Zvilo said both companies will create products for the region’s consumer base.
“One key metric is to reduce the number of unbanked people in the Balkans, almost 40%, by providing the necessary digital financial tools for the market and savings of up to 85%,” it added.
Reacting to the new, Admir Imani, the Chairman of Zvilo, who described the Balkans as “an often-overlooked market”, expressed excitement at the collaboration.
“We will be working with Mastercard to help transform how businesses in the region can access working capital and provide liquidity, reducing complexity and risk,” Imani added.
The State of SME Lending in the Balkans
According to Zvilo, access to finance for small and medium businesses in the South-eastern Europe region deteriorated during the COVID-19 pandemic.
The company also believes that the anticipation of future recession across the global market has further impeded any opportunity for lenders to finance SMEs at a pre-covid level.
According to the SME Policy Index published by the Organisation for Economic Co-operation and Development (OECD), the European Training Foundation, the European Union, and the European Bank for Reconstruction and Development, SMEs comprise over 99% of total enterprises in the Balkans and are the backbone of local Balkan economies.
Of this, the Index reports, between 30–50% of SMEs operate within the trade sector, an industry that has significant amounts of cash locked up in working capital.
On the other hand, the World Bank Enterprise Surveys found that an average of 39% of companies in the Balkans are currently using term loan financing for their working capitals.
However, due to the difficulty of obtaining debt, terms loans have only be able to cover around 13% of working capital needs for businesses in. There is, therefore, a significant demand for debt financing, with an average of 41% of businesses needing loans.
However, because roughly 75% of loans require considerable collateral, access to finance is limited in the region, the Survey also found. Finance is particularly inaccessible to SMEs because lenders are requesting for collateral that has almost200% (on average) of the value of the loans they require.
Zvilo believes its partnership with Mastercard gives it an upper hand to change this situation.
The digital platform recently launched a Supply Chain Finance programme in Kosovo to enable SMEs to access funding without the need for any collateral.
“With the program well underway, Zvilo is also in the final stages of optimising its innovative Supply Chain Finance platform with an artificial intelligence engine,” Zvilo added.
Meanwhile, Mastercard has recently been expanding its list of partners by added prominent Buy Now Pay Later (BNPL) brands to make BNPL features available to its millions of customers and merchants around the world.
The American payments giant is also the power behind the recently launched Nexo Card designed for select European markets by the cryptocurrency loan platform, Nexo, as its first crypto-backed card.
In a major effort to boost the digital economy, Mastercard also recently formed a partnership with Massmart to connect small, medium and micro-enterprises for efficient digital commerce solutions.
Zvilo, a London-headquartered digital lending platform founded in 2019, has signed a Memorandum of Understanding (MoU) with American payments giant Mastercard “to revolutionize Small and Medium-sized Enterprise (SME) lending in the Balkans”.
The start-up
Startup
A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is created by at least one or more entrepreneurs. These seek capital as a means to bypass a limited availability of capital and combat high costs. This is why startups seek funding from funding rounds, crowdfunding, venture capitalists, financial institutions, or other sources. What Makes Startups Successful?Given the fact that most startups fail, the first three years of a startup are critical which is why startup founders require capital for talent acquisition, creating effective business models and plans.In parallel it is important to provide proof-of-concept for the long-term through an established user base and consistent revenue streams. Many startups use seed funding, which occurs during the first stage of funding rounds, where fundraised capital is used to conduct market research and product or service development.Sometimes, startups go through an acquisition process, where they merge larger companies competing in a similar industry. Companies that generate less than $20 million annually, possess less than 80 employees, and are primarily controlled by the founding entrepreneur(s) are generally classified as startups. Today, some of the world’s most successful companies started as startups, such as Facebook, Uber, and SpaceX to name a few.
A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is created by at least one or more entrepreneurs. These seek capital as a means to bypass a limited availability of capital and combat high costs. This is why startups seek funding from funding rounds, crowdfunding, venture capitalists, financial institutions, or other sources. What Makes Startups Successful?Given the fact that most startups fail, the first three years of a startup are critical which is why startup founders require capital for talent acquisition, creating effective business models and plans.In parallel it is important to provide proof-of-concept for the long-term through an established user base and consistent revenue streams. Many startups use seed funding, which occurs during the first stage of funding rounds, where fundraised capital is used to conduct market research and product or service development.Sometimes, startups go through an acquisition process, where they merge larger companies competing in a similar industry. Companies that generate less than $20 million annually, possess less than 80 employees, and are primarily controlled by the founding entrepreneur(s) are generally classified as startups. Today, some of the world’s most successful companies started as startups, such as Facebook, Uber, and SpaceX to name a few.
Read this Term in a statement on Wednesday said the collaboration will support its plans to transform the banking sector in the Balkans “by enabling access to short-term working capital across different value chains.”
“The partnership will focus on generating digital financial products within the trade sector, reducing barriers for SMEs wanting to access working capital,” Zvilo said.
At a future date, both companies will also work together to launch a digital wallet for SMEs. The wallet will be equipped with savings, payments
Payments
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times.
Read this Term, and other functionalities, Zvilo noted.
The startup’s partnership follows its recent signing of a debt facility of up to €50m with a London-based alternative asset management company to enable Zvilo scale its SME lending programme in the Balkans.
With the new MoU with Mastercard, Zvilo said both companies will create products for the region’s consumer base.
“One key metric is to reduce the number of unbanked people in the Balkans, almost 40%, by providing the necessary digital financial tools for the market and savings of up to 85%,” it added.
Reacting to the new, Admir Imani, the Chairman of Zvilo, who described the Balkans as “an often-overlooked market”, expressed excitement at the collaboration.
“We will be working with Mastercard to help transform how businesses in the region can access working capital and provide liquidity, reducing complexity and risk,” Imani added.
The State of SME Lending in the Balkans
According to Zvilo, access to finance for small and medium businesses in the South-eastern Europe region deteriorated during the COVID-19 pandemic.
The company also believes that the anticipation of future recession across the global market has further impeded any opportunity for lenders to finance SMEs at a pre-covid level.
According to the SME Policy Index published by the Organisation for Economic Co-operation and Development (OECD), the European Training Foundation, the European Union, and the European Bank for Reconstruction and Development, SMEs comprise over 99% of total enterprises in the Balkans and are the backbone of local Balkan economies.
Of this, the Index reports, between 30–50% of SMEs operate within the trade sector, an industry that has significant amounts of cash locked up in working capital.
On the other hand, the World Bank Enterprise Surveys found that an average of 39% of companies in the Balkans are currently using term loan financing for their working capitals.
However, due to the difficulty of obtaining debt, terms loans have only be able to cover around 13% of working capital needs for businesses in. There is, therefore, a significant demand for debt financing, with an average of 41% of businesses needing loans.
However, because roughly 75% of loans require considerable collateral, access to finance is limited in the region, the Survey also found. Finance is particularly inaccessible to SMEs because lenders are requesting for collateral that has almost200% (on average) of the value of the loans they require.
Zvilo believes its partnership with Mastercard gives it an upper hand to change this situation.
The digital platform recently launched a Supply Chain Finance programme in Kosovo to enable SMEs to access funding without the need for any collateral.
“With the program well underway, Zvilo is also in the final stages of optimising its innovative Supply Chain Finance platform with an artificial intelligence engine,” Zvilo added.
Meanwhile, Mastercard has recently been expanding its list of partners by added prominent Buy Now Pay Later (BNPL) brands to make BNPL features available to its millions of customers and merchants around the world.
The American payments giant is also the power behind the recently launched Nexo Card designed for select European markets by the cryptocurrency loan platform, Nexo, as its first crypto-backed card.
In a major effort to boost the digital economy, Mastercard also recently formed a partnership with Massmart to connect small, medium and micro-enterprises for efficient digital commerce solutions.
Source: https://www.financemagnates.com/fintech/zvilo-taps-mastercard-to-open-up-sme-lending-in-the-balkans/
