Creating the Conditions for Inclusive Economic Growth on a Global Scale

To help small and midsize businesses thrive, we must increase their access to working capital. A new policy paper shows how C2FO’s solution can lead the way. 

By Sandy Kemper

For the second year in a row, C2FO has received an endorsement in a major policy paper at the B20 Business Summit, the official forum for the G20 and the global business community. 

The paper, which will be presented to the G20 in New Delhi, India, recommends ways that international leaders can achieve sustainability goals and encourage long-term, inclusive economic growth without spending scarce public resources.

Work on the paper was led by Gianluca Riccio, vice chair of the Business at OECD Finance Committee and member of both the B20 Financing for Global Economic Recovery Growth Taskforce and the B20 Action Council for ESG on Businesses at the B20 India.

The paper presents research that business productivity can be increased by solving companies’ working capital needs. Improve their access to capital, and they’ll possess the resources they need to grow.

C2FO’s platform — and its ability to deliver low-cost, convenient access to working capital — is cited as a catalyst for doing that. It’s an honour for our team that we were consulted on this topic and that our platform is being highlighted as a solution for one of the most important challenges facing the global economy.

This year’s paper draws attention to the fact that more than 50% of the world’s gross domestic product (GDP) is generated by small and midsize businesses, which employ more than 60% of the world’s working population.

Despite that, small and midsize businesses are universally underfunded by the traditional finance system, and universally, these businesses cite lack of access to working capital as their No. 1 or No. 2 impediment to growth.

The good news — and here is where it really gets interesting — is that we know that making capital available to these small and midsize businesses is a powerfully effective method for sparking job growth in developing countries.

The International Finance Corporation (IFC) estimates that 16.3 new jobs are created for every $1 million in working capital made available to small and midsize businesses in developing nations.

Globally, these businesses, along with their larger commercial peers, have more than $40 trillion of working capital need. All the working capital lending in the traditional financial system, though, is only in the $4 trillion to $6 trillion range. Let’s say a platform like C2FO, which unlocks working capital and quickly delivers it to the businesses that need it, could fund even a small part of this $34 trillion to $36 trillion delta. For every trillion dollars funded, 16.3 million jobs could be created.

Those jobs represent an important step forward for the world and the economies where they’re created, but they mean even more for the people who hold them. Job creation provides the means for individuals and families — and even entire communities — to grow and prosper.

Alexander “Sandy” Kemper is the founder of C2FO and serves as chairman of the board and CEO.