African small and medium-sized enterprises (SMEs) risk missing out on an estimated US$80 billion financing opportunity as emerging digital finance platforms open new channels for raising capital but expose weaknesses in businesses’ financial records and corporate governance.
The warning highlights a critical barrier to Africa’s efforts to close its SME financing gap: while financial technology, blockchain and asset tokenisation are creating alternative routes for mobilising investment, many businesses lack the financial discipline and documentation required to attract institutional capital.
Mr Ebenezer Ghanne, Chief Executive Officer and Co-founder of WeWire, a virtual asset company, said proper bookkeeping was the first requirement for SMEs seeking to benefit from emerging financing opportunities.
He argued that access to alternative finance would remain limited if businesses could not provide credible records of their revenues, profitability, receivables and overall financial performance.
Speaking at the Africa Virtual Asset Summit (AVAS) in Accra on Tuesday, Mr Ghanne said many African businesses had commercially viable models but struggled to demonstrate their financial value to potential investors.
READ ALSO
“I think the first thing businesses in Africa need to do is proper bookkeeping,” he said.
His comments point to a structural challenge in Africa’s SME financing landscape, where the difficulty is not simply the availability of capital but also the ability of businesses to meet the requirements of investors.
According to development finance institutions, African SMEs face an estimated annual financing gap of US$80 billion, despite accounting for a significant proportion of businesses and employment across the continent.
Limited collateral, inadequate credit histories and weak financial reporting have traditionally restricted their access to bank financing, leaving many businesses dependent on personal savings, informal borrowing and internally generated funds to sustain operations and expand.
The emergence of tokenisation, however, presents an opportunity to broaden the sources of financing by connecting businesses and their underlying assets to a wider pool of investors.
Tokenisation involves converting ownership rights or financial assets into digital tokens that can be traded or invested in through digital platforms, potentially making previously inaccessible investment opportunities available to a broader range of market participants.
Mr Ghanne said the technology could help address some of the structural limitations of conventional SME financing by transforming business assets into investment products that institutional investors could accommodate within their investment frameworks.
However, he cautioned that technology alone would not resolve the financing challenge, particularly where businesses lacked the financial transparency needed to support investment decisions.
He said SMEs must formalise their operations through business registration, maintain proper financial statements and separate personal finances from business accounts to improve transparency and investor confidence.
“The challenge is not always the lack of capital. Sometimes the challenge is making businesses investable,” he said.
He explained that many institutional investors and fund managers were interested in supporting businesses but operated under investment mandates that restricted direct investments in smaller enterprises.
Through trade finance tokenisation, he said, real business assets could be converted into digital investment products, potentially creating a structure through which institutional investors could participate in financing activities that might otherwise fall outside their investment mandates.
For Ghanaian SMEs, this could create opportunities to mobilise financing beyond traditional bank lending, particularly for businesses with viable trade transactions and assets but insufficient conventional collateral.
Mr Ghanne said WeWire was working with businesses to strengthen their financial and operational structures to position them to benefit from such alternative financing arrangements.
He added that tokenisation could also help address liquidity and collateral constraints within the financial system while expanding international investor participation in Ghanaian investment products.
The opportunity, however, will depend on the credibility of the underlying assets, the quality of financial disclosures and the effectiveness of regulatory oversight.
For Ghana, the development of a credible virtual asset ecosystem could provide an additional channel for connecting domestic businesses with international capital, potentially supporting trade, enterprise expansion and investment diversification.
Mr Ghanne commended regulators for efforts to establish clearer frameworks for the digital asset industry, saying regulatory certainty would be important in encouraging innovation while safeguarding investors.
He expressed optimism that Ghana could become a leading digital asset innovation hub in Africa if regulatory reforms and private-sector participation continued to advance.
The Africa Virtual Asset Summit brought together regulators, policymakers, financial institutions, fintech companies and digital asset industry players to examine the future of finance on the continent, with discussions covering tokenisation, blockchain technology, digital payments and financial inclusion.
