BancABC SME proposition targets smaller end

Boitshepo Majube | Friday March 21, 2014 12:37

 

In terms of turnover, BancABC says they consider business with a turnover of between P0 and P10 million as SMEs.

At the launch of the bank’s SME value proposition on Wednesday in Gaborone, BancABC Managing Director, Jitto Kurian says it is important for the bank to provide support to SMEs.  There has been a tendency in the market to focus on the upper tier of the SME sector, he says.  “A majority of SMEs in Botswana are actually very small,” Kurian says, further pointing to the fact that this was one of their driving forces to make the proposition as the SME’s business partner.

He said BancABC and International Financial Corporation (IFC) entered into a partnership for the latter to provide technical and advisory services.  They were to set-up and introduce BancABC SME Products and services.  “The SME project has been underway for the last 18 months,” Kurian says.   In its Botswana case study, BancABC says 45% of SMEs have less than four employees, whilst 35% of SMEs have between five and 30 employees. 

In the bank’s new proposition, BancABC says that they would work individually with each SME as a unique entity to determine their financial needs and to work on a holistic solution for them to grow.

“This includes assistance with working capital and order financing, asset financing and capital goods including property finance, transactional banking needs and savings, as well as investment needs,” BancABC Country Head of Retail and SME Banking, Gavin Savala says.  

Despite SMEs contributing between 35 and 45% to Botswana’s GDP, BancABC states that small SMEs do not have specialised and advisory services or relationship management.

“It is important to create a favourable environment that allows them to expand and grow,” Savala says.  Savala says having identified the needs most SMEs are faced with, BancABC was able to use these market insights to develop two innovative transactional accounts that will assist SMEs reach their full potential.  He says the two transactional accounts are the Bosele Starter Account and the Ikage Business Account.

“Bosele Starter Account provides solutions for start-ups and very small businesses such as street vendors, taxi operators, and youth to become bankable and to acquire knowledge on easy, convenient and safe ways on managing cash,” he says. Savala says Ikage Business Account is designed for the more established businesses with the benefit of earning interest on their daily deposits as well as cheap transactions and free online banking. BancABC says SME needs are working capital, capital investment needs, transactional needs, saving and investment needs and safety needs.  “Our proposition would be able to help SME’s to overcome these challenges,” Savala says.