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Right advice more important for SMEs than credit facilities

07 July 2009 Standard Chartered's expertise and experience enables it to be a strategic catalyst and important leader in the small and medium enterprise (SME) sector, taking best practice from its many markets and customising its 'know-how' to further build this growth sector. Early last year, the bank increased its partnership initiatives with other leading organisations and government entities to broaden the platform for its tailored SME programmes. Standard Chartered has a full array of products and services to suit every requirement of the SME segment, right from the point of company formation through its growth and management of the company cash flow cycle. Jamal Alvi, Head of SME Banking, Standard Chartered Bank, UAE, spoke to Emirates Business on the bank's initiatives to increase its market share in the SME segment. "In today's economic climate, banks need to offer more than credit and lending facilities to SMEs. Increasingly, SMEs seek professional advice and assistance to grow their business internationally. International trade and the risks involved in it can be rather complex to understand. "Standard Chartered's international network and trade expertise spanning Asia, Africa and the Middle East places the bank in an enviable position to be the right partner for SMEs both locally and across borders." SMEs have been recording double-digit growth in the UAE. Has the growth rate reversed in the wake of the economic slowdown? Though the growth rate has slowed down, we haven't seen it reversing. There are segments like food stuff, oil and gas up stream and building material (linked with infrastructure projects) showing rising growth rates. How aggressive have you been to attract SME business? SME is a key growth area for the bank. It contributes more than 70 per cent to the UAE's non-oil GDP and plays a pivotal role in the market's economic growth. Over the past four years, Standard Chartered has committed more than 100 people to this business and rolled out state-of-the-art banking solutions for SMEs in the market. For example, our customers have the ability to open accounts in multiple countries from their home markets and manage all of their accounts through a single internet banking platform, Straight-to-Bank, which allows our SME customers to access international markets and provide them with unmatched control over their business. Your bank had a head start in the segment. How much has your market share grown? In recent years, we have achieved five per cent market share of the SME segment. Our strategy is to keep growing aggressively by providing the necessary financial tools and strategic advice to UAE companies doing business in the Emirate and companies from other markets who are interested in doing business here - facilitating cross-boarder trade.

Do you think the SME sector is maturing as it becomes a key driver to the overall economic growth? The government is supporting SME growth. Abu Dhabi, Dubai, Sharjah and Ajman governments are very active in helping SMEs prosper and there are various government-sponsored schemes that are being expanded to further boost this segment. We are working in close partnership with these government entities to provide improved financial solutions to both start up and established SMEs in the country. All the free trade zones are SME havens. What new SME products are you offering? We offer a full range of products and services to the SME sector. Our offering is tailored to the business needs, covering everything from cash management, trade and FX to working capital and long-term financial solutions. Standard Chartered's expertise and capabilities across these areas has enabled us to supplement our product offering with a comprehensive programme of free workshops on trade and foreign exchange to help our customers better understand the technical aspects of these subjects. What is the share of SMEs in your total revenue? For us at this moment, our SME is still in its embryonic stages and we look to growing the business in the next two years. What is the risk perception especially when most SMEs do not open their books to audit and low level of disclosures? We work closely with our customers and we have well-established procedures that help us understand their financial position. This ranges from reviewing a customer's bank statement to analysing audited financial statements. What is the exit route available to you in delinquent exposures? We do not comment on specific client information. However, as a responsible and leading financial institution, we take a proactive approach to assist customers who may be having genuine issues with the aim of helping borrowers to manage their risks properly and not over leverage. Do you offer venture capital or stake swap? UAE government bodies are currently providing this kind of support to entrepreneurs. Can you quantify your contribution to the UAE GDP through SME financing? SME banking is an important and strategic business for Standard Chartered Bank and a key platform for future growth especially for the country. Our market participation and experience across Asia, Africa and the Middle East certainly puts us in a good position to help shape the development of the sector. Our strategy remains customer-centric and our footprint in key markets allows us to bring the right customer value proposition. How much has your SME lending portfolio increased? In recent years, we have become one of the top three players in SME banking in the UAE. As part of our strategy to grow our business, we have specialist teams covering the key trade corridors of the UAE and proactively work with alliance partners to initiate banking needs for start-ups. How attractive is SME funding? The whole business proposition is very attractive as it provides good diversification to the bank and the risk is spread across granular borrowers. And finally, how many SMEs you have funded so far and the quantum. About 25 per cent of our customers are borrowing customers reflecting the bank's commitment to assisting

About 25 per cent of our customers are borrowing customers reflecting the bank's commitment to assisting the development of the SME sector in the UAE. Profile: Jamal Alvi Jamal Alvi, Head of SME Banking, Standard Chartered, UAE Jamal is responsible for the overall strategy and governance of the SME business. His unit develops products and services to further build on Standard Chartered's strong SME market share. Jamal has been with Standard Chartered Bank for four years and prior to taking on the SME Banking role, he was regional credit officer for the bank across the Middle East, South Asia and Africa region, covering more than 20 countries. By Bhaskar Raj Emirates Business 24/7 2009 Article originally published by Emirates 24|7 07-Jul-09

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