NCFA urges Justin Trudeau to use fintech firms in distributing capital to SME amid COVID-19 outbreak
Mon, 20 Apr 2020, 00:38 am UTC
The National Crowdfunding and Fintech Association of Canada (NCFA) advises Prime Minister Justin Trudeau to use fintech firms to speed up the distribution of capital to small businesses during the coronavirus pandemic.
Coronavirus is a global issue and governments around the world are working hard to deliver financial assistance to the people in time. Several are using alternatives to speed up the process. In the United States, the government uses Square’s Cash App to distribute stimulus payments.
NCFA penned an open letter and urged the government of Canada to partner with fintechs. The financial innovation ecosystem also offered several recommendations.
“The Canadian government should recognize that FinTech companies can play a central role in distributing capital to small businesses and early-stage companies. Online lending and crowdfunding platforms have invested to build the software for onboarding, screening, approval, distributing and servicing of loans and investments to Canadian small businesses,” the letter read.
“Canada’s regulators and policymakers need to work with our fintech entrepreneurs who have the digital infrastructure to help the Canadian government achieve its goal of saving small businesses and getting the economy get back on track faster.”
Based on the list of recommendations, working with established online lending fintechs make distribution and managing small business loans fast and cost-effective. It also noted that the UK government has already approved the use of fintech to administer loans and the U.S. has partnered with fintechs PayPal, Intuit, and Square for its coronavirus paycheck protection program.
In March, a $2 trillion stimulus package was signed into law to help millions of Americans financially amid the pandemic. Square CEO Jack Dorsey offered to help the government distribute COVID-19 stimulus payment especially to people who don’t have bank accounts.
“People need help immediately. The technology exists to get money to most people today (even those without bank accounts). Square and many of our peers can get it done. US government: let us help,” Dorsey wrote on Twitter.
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