SMEs struggle to find simple, smart, accessible banking solutions

While the growth of South Africa’s SMEs has often been cited as a potential panacea to the country’s economic woes, these businesses typically struggle to access a full suite of business banking products. Employing up to 60% of South Africa’s workforce and contributing 34% of GDP, only 14% of SMEs are formalized, limiting their access to the financial services that could help them grow, and employ even more people. 

Chief Executive of Sasfin’s newly unified business and commercial banking division, Sandile Shabalala is resolute in his drive to change this status quo, and in just over three months in the role, has already identified ways and means for the bank to expand its business banking offerings for this underserved but vitally important segment of the economy.  

As the launch CEO of the fully digital TymeBank, building it to more than 1,000,000 customers by the time he moved on from there in 2019, Shabalala has particular insights into what business banking clients really need. 

“Many business owners feel like their banks just don’t ‘get them’, and they see banking processes as onerous and tedious, lacking in transparency and flexibility,” Shabalala explains. “They’re looking for a partner that understands their needs – and that has created solutions that respond directly to their business requirements, whether it’s for day to day transactions or by helping businesses grow by making funding available to them.” 

McKinsey research found that slow bank lending processes, such as an insistence on hard-copy documentation and branch visits, was behind SMEs’ slow uptake of the COVID-19 loan guarantee scheme. These slow processes are typical of many applications and transactions in South African banking, with the research highlighting how significant a barrier to accessing necessary finance these processes really are. 

“These factors are at play in SMEs’ everyday operations, and not just in the context of the COVID-19 loan guarantee scheme,” Shabalala says. “When your working day is consumed with keeping your business alive, you don’t have time to fill in forms, get documents certified, or stand in long queues during banks’ limited operating hours.”

Streamlining access to growth funding 

“SMEs need solutions that create value, via streamlined customer service interfaces, and with a single point of contact. Having access to this level of understanding from your business bank will take a weight off an entrepreneur’s mind, while giving them access – at their fingertips – to a range of financial products and services that will help them sustain and grow their operations.” 

“When it comes to accessing funding, SMEs need relevant products with  simple processes that are completed with as few touch points as possible, so that they can get quick decisions that empower them to make the best choices for their business,” he explains. 

The customer must be at the heart of SME banking

The best way to find out what SME banking customers want is to talk to them, and Shabalala is firm in his resolve that Sasfin’s strategy is not about pushing one product across the sector, but is rather about having broader conversations to build relationships with customers so that the bank can enhance its value offering to them. 

“The only way that we can be effective as growth solutionists, is by ensuring that we immerse ourselves more deeply with the customer, and bring senior expertise to the table. By way of example, we have a vastly experienced, senior and solution-driven credit committee where our Group CEO actively participates, which is very rare,” he notes, adding that Sasfin’s specialist dealmakers are willing to provide value-added service and advice beyond simply offering a loan, a unique point of difference for the SME segment. 

“It’s important to these business owners that their banks are accessible to them, whether that’s through well-trained and insightful client service representatives that are readily available, or whether it’s through accelerating our digital-first approach that puts the full power of our banking suite at their fingertips, so that they can manage their finances when they need to, wherever they may be,” he concludes. 

With a focus on simplification and taking the complexity out of banking for the women and men who are at the coalface of building businesses, creating jobs, and growing the economy, Shabalala is focused on putting power back in his customers’ hands, empowering them with the tools that they really need.