Stanbic Bank Ready to Boost SME Growth with New Support Initiatives

Stanbic Bank Ready to Boost SME Growth with New Support Initiatives

Eric Tsiri, Head of Enterprise Banking at Stanbic Bank Ghana, has reiterated the bank’s readiness to support small and medium-sized enterprises (SMEs) in Ghana.

Mr. Tsiri said this on an X-Spaces discussion on the topic ‘Access to Finance: Bridging the Gap for SMEs.’ He noted that contrary to the common misconception that banks are reluctant to finance SMEs, banks, particularly Stanbic Bank are rather eager to provide financial support to businesses despite the challenges as it is integral to their mandate.

Mr. Tsiri elaborated on some of the challenges in providing solutions for SMEs in Ghana. He mentioned that “Opaqueness in business operations is one of the main challenges SMEs have. A significant number of SMEs operate with a lack of transparency, making it difficult for banks to understand their business models fully.

This opaqueness complicates the process of assessing the viability of the business for financial support. There is also the issue of the character and credibility of business owners which are critical in banking. If a business owner does not exhibit trustworthiness, banks are hesitant to provide financial assistance.”

“Many SMEs struggle with maintaining accurate financial records. Inadequate record-keeping makes it difficult for banks to assess the business’s financial health, further complicating the lending process. Also, the habit of issuing dishonoured cheques is a red flag for banks.

When SMEs regularly issue dud cheques, it raises concerns about their financial stability and reliability. Furthermore, access to finance is often contingent on the availability of collateral. Many SMEs, however, lack sufficient collateral to secure loans, limiting their ability to access necessary financing,” Eric Tsiri added.

Speaking on the bank’s approach to SMEs financing, the Stanbic executive said the bank treats every case as a unique one in fashioning solutions. He said “Stanbic Bank offers a range of financing options tailored to the specific needs of SMEs.

The bank does not adopt a one-size-fits-all approach; instead, we thoroughly assesse each client’s business needs, cash flow, inventory, receivables, and payment terms before proposing a financing solution. Even in some cases, we may advise a client against taking a loan if it is not in their best interest.”

Mr. Tsiri also mentioned some financing options the bank has available to SMEs. He mentioned

working capital support that is provided to bridge gaps in cash flow, such as when suppliers demand payment before the SME’s customers have settled their invoices and bridge financing, a short-term financing that helps businesses manage cash flow between transactions, particularly when waiting for payments on credit sales. Others are contract financing, which is offered to businesses that need funds to execute contracts, asset financing, a long-term financing that supports businesses in acquiring assets like vehicles or setting up infrastructure, with repayment structured over the useful life of the asset, and guarantees and letters of credit for international transactions.

Eric Tsiri also highlighted Stanbic Bank’s business incubator, which supports SMEs beyond just credit. The incubator, he said, provides access to information, markets, and networking opportunities. Additionally, the bank is exploring innovative ways to de-risk the SME sector through partnerships with fintech companies and the use of artificial intelligence.

Stanbic Bank remains committed to driving growth in Ghana’s economy by supporting SMEs, which are seen as the engine of economic growth. The bank’s efforts in this regard are reflected in its position as the top provider of loan facilities in 2023. The bank also hosts SME clinics, such as the upcoming event in Kumasi, aimed at preparing businesses to access credit by addressing the challenges that typically hinder them.