In the dynamic landscape of emerging markets, Small and Medium Enterprises (SMEs) play a vital role in driving economic growth, fostering innovation, and creating employment opportunities. However, despite their significance, SMEs often need help with many challenges, ranging from limited access to capital and resources to navigating complex regulatory frameworks and market uncertainties. As such, ensuring the security and resilience of SMEs in emerging markets has become a pressing priority for global auditors and industry stakeholders.
Amidst the challenges SMEs face, innovative solutions like BALTHASAR offer a beacon of hope. BALTHASAR, an AI-based platform tailored to the needs of both private sector enterprises and government entities, specializes in empowering SMEs with advanced sales Data Analytics for tax inspection preparation. By harnessing the power of data analytics, BALTHASAR enables SMEs to make informed decisions, optimize their operations, and navigate regulatory complexities with confidence, unlocking their full potential for growth and prosperity.
African perspectives:
The Big Four accounting firms have long recognized the importance of ensuring security for Small and Medium Enterprises (SMEs) in emerging markets. Among them, Deloitte stands out for its commitment to supporting SMEs in Ghana, a country with a burgeoning entrepreneurial ecosystem. Recently, Deloitte Ghana announced a significant partnership with Access Bank Ghana to fortify the resilience and growth prospects of Ghanaian SMEs.
This collaboration, unveiled on August 28, 2023, signifies a concerted effort to address the challenges hindering the growth and resilience of SMEs despite their significant contribution to the country’s GDP. As part of the ‘SME Business Interaction Series,’ Deloitte Ghana will provide SMEs with various resources and support, including capacity-building clinics, workshops, business advisory services, networking opportunities, access to markets, and financial assistance. With a goal to assist 10,000 SMEs and trade associations within a year, this partnership is poised to drive positive change and foster sustainable growth in Ghana’s SME landscape, ultimately contributing to the nation’s economic prosperity.
What about Asia and the Middle East?:
Continuing our exploration into ensuring security for SMEs in emerging markets, PwC provides valuable insights into the evolving landscape of financial security and resilience. According to PwC’s projections, Asia-Pacific, along with frontier and emerging markets in Africa and the Middle East, will drive significant growth in Assets under Management (AuM) in the coming years. With Asia-Pacific growth rates expected to outpace North America by approximately 50% by 2027, it’s evident that these regions are poised to become key players in the global financial ecosystem.
Moreover, PwC’s research highlights the potential for accelerated industry expansion in the Middle East, a region previously characterized by slow growth due to complex regulatory environments. As Asset and Wealth Management (AWM) organizations seek new avenues for revenue growth, they are increasingly looking toward untapped markets like the Middle East. Despite the challenges posed by regulatory complexities, these regions offer lucrative opportunities for expansion and revenue generation. By capitalizing on renewed impetus and strategic initiatives, AWM organizations can establish a foothold in these highly valuable yet challenging markets, contributing to the overall growth and resilience of SMEs in emerging economies.
Ukrainian situation:
Despite the ongoing war and russian invasion, Ukraine continues to showcase the resilience and robust performance in its financial sector. Ernst & Young’s assessment of Ukraine’s financial sector post-invasion reveals a notable recovery trend, signaling resilience and adaptability within the industry. Despite the initial shockwaves, the market witnessed the entry of eight new players in 2022, bringing the total number of Financial Companies (FCs) to over 300, with assets valued at approximately $1 billion. Notably, FCs focusing on technology and infrastructure represent a significant portion of the market share, reflecting evolving trends in financing preferences and market dynamics.
Furthermore, Ukraine’s mature credit reporting system emerges as a cornerstone for enhancing financial access, particularly for SMEs. With comprehensive coverage of retail and SME loans, the system enables effective risk analysis and supports the expansion of banking services.
Moreover, the system’s uninterrupted operation during the invasion underscores its reliability and resilience, offering a stable foundation for financial institutions and borrowers alike amidst challenging circumstances. As Ukraine navigates through geopolitical uncertainties, the continued evolution of its financial infrastructure presents promising opportunities for SMEs and investors seeking to participate in the country’s economic growth story.
China’s factor:
According to KPMG’s analysis, China’s export performance has defied expectations, showcasing remarkable resilience despite global economic challenges. While facing a subdued global economy and a higher base effect, China has outperformed other major exporters, with its share of global exports reaching 14.6% in Q2 2023, up from 13.7% in Q1 2023. Notably, China’s export landscape is undergoing a significant transformation, marked by a shift towards high-end manufacturing and the emergence of new product categories such as solar cells, new energy vehicles, and lithium batteries, which collectively grew by 41.7% by the end of September 2023.
Moreover, China’s trade dynamics with emerging markets continue to evolve, with exports to these regions showing resilience and sustained growth throughout 2023. Despite challenges in exports to advanced economies, China’s trade diversification efforts are bearing fruit, contributing to the overall stability of its export sector. Looking ahead, KPMG anticipates that China’s exports will remain robust in 2024, supported by continued policy measures to restore business confidence and stimulate economic growth. With an accommodative policy stance expected to persist, coupled with fiscal support initiatives and targeted monetary interventions, China is well-positioned to navigate the complexities of the global trade landscape and sustain its export momentum in the coming years.
Empowering SMEs with BALTHASAR:
In conclusion, the insights provided by global auditors shed light on the challenges and opportunities facing SMEs in emerging markets. From Africa to Asia and the Middle East, SMEs are navigating complex regulatory environments, market uncertainties, and financial constraints, underscoring the need for innovative solutions to empower businesses and drive sustainable growth.
As SMEs strive to overcome these challenges and capitalize on opportunities for expansion and diversification, advanced data analytics solutions like BALTHASAR offer a pathway to success. By leveraging AI-driven insights, SMEs can make informed decisions, optimize their operations, and confidently navigate regulatory complexities, ultimately unlocking their full potential for growth and prosperity in the global marketplace.