SMEs require a banking relationship, even in this digital age

The World Bank estimates that small businesses constitute 90% of all businesses worldwide. In Sub-Saharan Africa alone there are 44-million small businesses, with small- and medium-sized enterprises (SMEs) accounting for 60% of jobs.

In SA, there are about 3.2-million SMEs, which make them the backbone of the economy with a crucial role to play in job creation and community upliftment.

These businesses operate in a challenging environment with about 80% of them failing in the first year and only about half of those that survive lasting beyond five years. The main reason for the failure rate is limited access to markets, funding and skills development. 

Standard Bank understands that SMEs' banking needs and behaviour have evolved, with some becoming more complex, largely due to digital technologies. However, having access to personal advice and banking relationships is still highly valued.

SMEs require convenient, secure, cost-effective relationship banking based on a deep understanding of their specific needs and of the industry, and on the ability to provide advice, practical solutions and access to world-class digital services and suitable products.

Standard Bank has seen a steady increase in the migration of SMEs to digital banking. The bank’s digital client “self-onboarding” empowers entry-level companies and sole proprietors with a fully digital self-service account from R7 per month, and access to a team of relationship bankers. To date, more than 400,000 clients choose to access the bank's digital solutions monthly, and the most common digital transactions include domestic payments, inter account transfers and statements.

However, as clients encounter broader business challenges and opportunities, the value of having a relationship with a dedicated and knowledgeable banker is also clearly understood. This is part of the reason that Standard Bank continues to see an increase in business client growth year on year. 

Increasingly, businesses are also considering expansion beyond our borders. Standard Bank has the distinct advantage of an unparalleled business banking footprint in 14 African markets and an ability to provide businesses with offshore capabilities in three jurisdictions as well as a partnership with the world’s biggest bank, the Industrial and Commercial Bank of China. This network of businesses is an opportunity for Standard Bank clients looking for insights and access into those markets. 

Standard Bank also offers non-financial support to SMEs aimed at helping to bolster the skills that new business owners need to face changing realities.

This includes advice about efficient business operations, cash flow management and market access, and mentoring through platforms such as the BizConnect portal, which provides existing and aspiring SME owners with access to an extensive range of content, sector insights, handy business templates and more to help them start, manage and grow their enterprises. 

In addition, the bank supports or creates sharing platforms, master classes and networking opportunities to help SMEs develop their business models, improve their cash flow management and establish valuable connections within their industries and value chains.

More entrepreneurs should look for financial services partners that stand alongside them, assist them as they grow, and are available when their advice is needed.

• About the author: Simone Cooper is head of Business and Commercial Banking for Standard Bank SA. 

This article was sponsored by Standard Bank.