May 2013 SME Access to Finance Global 50
May 2013
SME Access to Finance - Global 50 -60% of MSMEs in the world are either un-served or underserved. The MENA region as a whole provides better access to finance for SMEs, but with sizeable differences between individual countries. Number & percent of MSMEs Unserved or underserved: - Source: IFC Slide 2
SME LOANS TO TOTAL LOANS Small Business – The Big Opportunity Potential SME lending opportunity 60 bln SAR in KSA Source: Union of Arab Banks/World Bank Financial Flagship Report Source: *Claims on Pvt Sect. SAMA April monthly Bulletin Slide 3
SHB and SMEs – The Journey Key Facts Number of Dedicated Staff Dedicated Business Centers Number of Relationships 40 7 4, 500+ 3 01 2 Q SME Banking wins 2 Best SME Awards 2 Parameter Based credit assessment 13 SME Credit Cards launched 1 st Bus Centre open in WA & EA Start roll-out of dedicated SME Business Centers 12 4 Q SME Income Statement & B/S separation SME Relationship teams present in three regions 12 1 Q 1 Total 7 Centers fully operational 1 st Bus Centre open in Riyadh Segmentation & MIS capabilities launched 12 2 Q SME Risk Acceptance Framework 0 Q 2 Regional managers of SME business on board Initiation of separate SME Credit Risk Policies/Procedures/ dedicated Ops 11 20 2010 Comprehensive plan covering business model, risk management etc Q 2 13 Slide 4
SHB’s Lessons Learned Geographically Dispersed Clients Dedicated SME branches – hub and spoke Target Operating Model Portfolio / Scale – Process redesign Access to Reliable Data SIMAH Taqeem Customer Evaluation Template based assessment SME Banking – not SME Lending Holistic banking for SME and owner Slide 5
Conclusions ü Increasing access to finance for SMEs requires a joint effort of many stakeholders, including the banks, the regulator, the government and industry groups ü For banks, SME banking presents a viable business proposition, in addition to it being a social obligation ü For SME banking to be a viable business proposition, banks need to redesign their policies, procedures and processes, across risk, operations, IT and front office ü The regulator and the government can help in providing the enabling infrastructure such as an effective credit bureau and a functioning guarantee scheme, and in considering preferential capital treatment for portfolios of SME exposures ü Industry groups such as the Chambers of Commerce could help in providing continuous education and development and training of SMEs SME Banking is a genuinely different business, which, if managed in the right way can be very beneficial for the SMEs, the Banks, and the development of the country Slide 6
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