A major friction in SME lending lies in the drop from application to approval. Many sources suggest that only around 44–56% of bank loan applications succeed, meaning 44–56% fail.
The reasons are familiar: credit risk, insufficiency of collateral, cash-flow uncertainty, documentation gaps, or strategic conservatism by lenders. Even when approved, the full loan may not be drawn.
We observe that this “funnel effect” is one of the key hidden drag factors on headline lending growth.
The headline number for lending may look strong, but latent demand and rejected/sidelined applications may be much larger. In upcoming posts, we’ll trace which segments or sectors see the highest conversion loss (e.g. micro-businesses, rural SMEs, or minority-led firms) and how underwriting innovation might reduce those losses.
As a founder of multiple businesses, Jamie believes that mindset, discipline and ambition are key drivers for success, both for his businesses and for his clients.
.png)
