Allica Bank Expands Its Footprint in SME Finance
In a notable shift in the UK financial landscape, Allica Bank has announced the acquisition of Kriya, a fintech company specializing in embedded finance solutions. This strategic move represents Allica's ambition to advance £1 billion specifically for small and medium-sized enterprises (SMEs) by 2028, carving out a significant market share in an arena that is seeing decreased confidence from small businesses.
A Bid to Reinvent SME Financing
Founded as MarketFinance but now operating as Kriya, the fintech has gained a reputation by processing over £4 billion in transaction volume since its establishment in 2011. Their integration of PayLater solutions offers SMEs flexible payment options, which are crucial at a time when traditional banks are retreating from business lending, leaving many SMEs struggling for financial resources.
Richard Davies, CEO of Allica Bank, emphasized the challenges SMEs face in accessing the necessary capital, stating, “For too long SMEs have struggled to access the flexible finance they need as the high street banks have retrenched.” Allica's rapid growth is showcased by its current total SME lending of £3.5 billion, laying the groundwork for its target of capturing 10% of the UK SME market by the end of the decade.
Growing Demand Amid Market Changes
The timing of this acquisition could not be more pivotal. Recent reports indicate that only 10% of small businesses can secure traditional funding forms like overdrafts or loans, suggesting a crisis of confidence in the banking system. This landscape creates a ripe opportunity for challenger banks like Allica, which have filled the lending void left by larger institutions.
While Allica Bank and Kriya share similar visions for the future of SME finance, they must navigate growing competition as high street banks begin to reclaim market territory. Allica’s earlier acquisitions—including AIB’s SME lending portfolio—demonstrate its commitment to scaling operations efficiently while providing innovative financing options.
Conclusion: A Future-Oriented Strategy
As Allica Bank and Kriya combine operations, they are positioned to offer a mix of financing solutions tailored to the modern needs of SMEs. This combination signals a critical step in reshaping the accessibility of capital for small businesses across the UK. For financial institutions looking to remain relevant, adapting to these emerging trends will be key as traditional financing models continue to evolve.
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