Standard Chartered ramps up SMME war chest
by Spencer Mogapi
From their body language, Standard Chartered Bank Botswana is intent on turning the Small, Medium and Micro Enterprises into a significant asset of their overall portfolio; and there is a lot of untapped potential.
Presenting a clutch of new offerings aimed at stimulating the relationships with the sector, the bank’s Global Head responsible for SMMEs said Botswana, like the rest of Southern Africa, will be the next frontier of the bank’s engagement with SMMEs.
This, he said, is after a big success in catering for SMMEs in Asia.
Tim Hinton said Standard Chartered Bank will use their wide network of reach to service the sector, which he observed has fast changing and peculiar needs.
He said the bank has always played in this sector, but now want to take their involvement to another level.
The intention, he said, is for Standard Chartered to double their participation and involvement in the SMME sector.
The bank’s announcement of new products coincided with the ten year anniversary of their banking in Botswana.
Hinton said Standard Chartered was ramping up its involvement because experience has shown that SMMEs are the backbone of every economy.
“The segment tends to grow at twice the rate of GDP in any economy. It, therefore, is a very important sector,” he said.
He pointed out that more often these businesses are run by an owner who is also directly responsible for production, sales, and production, especially at the early years it has been found that the business has fast changing needs.
“The time they have is scarce. It is therefore for us to help them in many fronts to get them to grow.”
He said that digital knowledge provides this economic segment with big opportunities.
The new clutch of offerings is aimed at helping SMMEs with working capital, including for short term trade.
The bank has also crafted new medium term lending offering, which is intended for business expansion.
Another product is a full range bouquet meant for risk protection.
SMMEs, especially those that have cash reserves, will be given a number of options in which to invest their money for optimal yields enhancement.
Hinton has deliberately set the threshold underpinning the definition of an SMME at a high point of around $30 million turnover as a way of catering for as many needs as is possible.
“Just to reach around $8 million, a business would have been around for so long as to have established a relationship with us as a bank. By then the relationship would have started to move away from collateral basis. Experience shows that at that stage the business is much more sophisticated in vintage as well as legacy,” said Hinton.
He said as Standard Chartered Bank they are well aware of importance of efficiency to SMMEs, hence they are assisting them to embrace the digital revolution.
“Currently as Standard Charted we are looking at Southern Africa as a region of great potential. The truth is if you service around 50 SMMES, you can very easily lend $100 million. We want to be a real partner to SMMEs that are coming up every day. If we service them well, we also will become a descent bank,” he said.
According Standard Chartered Bank Botswana’s head of SMME sector, Motlalepula Mpho, these new products are testimony of the bank’s resolve to remain relevant to customers.
“It is only when we provide relevant solutions to the customers that we serve that we will remain relevant to our customers,” she said.
Mpho said the fact that SMME sector in Botswana employs well over 300 000 people was proof of the sector’s importance to the overall economy.
“SMMEs support every sector, be it mining, tourism and other,” she said.
She further said under the new set of products, current accounts at Standard Charted Bank will henceforth be opened in a day.
“Our Online Platform talks to convenient banking. Money will now hit the recipient the same day,” Mpho said.
She said Standard Chartered will now be clearing with South African counterparts everyday at noon.
This, she said, is good for customers looking for favourable exchange rates.
“It also enables customers to pay their suppliers on time.
Another good thing about the new offerings announced is that Standard Chartered will now have a facility supporting the commercial needs of the businesses.
“Such loans used to be ten years; it’s now become fifteen years. This is a first for Botswana that we have not seen in our local market.”