{"id":564691,"date":"2021-02-21T13:31:11","date_gmt":"2021-02-21T13:31:11","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/02\/21\/bank-lending-to-smes-isnt-just-the-right-thing-for-the-economy-its-the-right-thing-for-shareholders-too\/"},"modified":"2021-02-21T13:31:11","modified_gmt":"2021-02-21T13:31:11","slug":"bank-lending-to-smes-isnt-just-the-right-thing-for-the-economy-its-the-right-thing-for-shareholders-too","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/02\/21\/bank-lending-to-smes-isnt-just-the-right-thing-for-the-economy-its-the-right-thing-for-shareholders-too\/","title":{"rendered":"Bank lending to SMEs isn\u2019t just the right thing for the economy \u2014 it\u2019s the right thing for shareholders, too"},"content":{"rendered":"<p><a class=\"content-anchor\" id=\"tldr-story-08\"><\/a> <strong>Banks need to get their acts together when it comes to SME lending<\/strong> \u2014 not because it\u2019s the right thing to do for the economy (it is), but because it\u2019s the right thing to do for their shareholders.<\/p>\n<p><strong>An AUC study <\/strong><strong><a href=\"https:\/\/enterprise.news\/egypt\/en\/news\/story\/f03c827a-028e-47da-8ca3-7cd715218f19\">we noted this morning<\/a><\/strong><strong> said the solution lies (to varying degrees) in NBFS <\/strong><strong>players<\/strong>, in teaching bank staff how to allocate credit, and in looking at the central bank-led programs that are pushing SME lending.<\/p>\n<p><strong>But that\u2019s a mis-diagnosis of the problem<\/strong>, which stems not from a lack of CBE leadership or bad loanmaking skills on the part of bankers. Rather, <strong>the problem is that banks are run by people \u2014 and people naturally choose the path of least resistance. <\/strong><\/p>\n<p><strong>The Central Bank of Egypt has (largely) done its part<\/strong>, mandating that loans to SMEs make up a set minium at every institution and providing banks with subsidized funding for onlending. Yes, non-bank financial services \u2014 factoring, leasing, merchant finance and more \u2014 could well fill the gap, as the authors of the AUC study suggested. But if banks allow it to happen, they\u2019ll be missing out on a generational chance in our very under-served market.<\/p>\n<p><strong>SMEs are the mainstream of economies the world over<\/strong> \u2014 they\u2019re also expensive to reach and expensive to bank. Globally, the pattern holds: Banks in EM chase small businesses only once they\u2019ve cornered the market on easier, more predictable returns loaning to big business (and to governments). And they meet success only when they learn to speak the language of SMEs instead of shoe-horning them into operations originally designed to serve either large corporate clients or individual customers.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Banks need to get their acts together when it comes to SME lending \u2014 not because it\u2019s the right thing to do for the economy (it is), but because it\u2019s the right thing to do for their shareholders. An AUC study we noted this morning said the solution lies (to varying degrees) in NBFS players, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10067],"tags":[633,4167,287],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-564691","post","type-post","status-publish","format-standard","hentry","category-parting-shot","tag-enterprisepm","tag-parting-shot","tag-smes","wpautop","entry"],"acf":{"mongo_id":"99ab26df-c374-416e-a108-ea0e219d752e","is_powered_by":true,"story_type":"1","photo_url":"","photo_position":"above","related_issue":[564679],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Bank lending to SMEs isn\u2019t just the right thing for the economy \u2014 it\u2019s the right thing for shareholders, too - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/21\/bank-lending-to-smes-isnt-just-the-right-thing-for-the-economy-its-the-right-thing-for-shareholders-too\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bank lending to SMEs isn\u2019t just the right thing for the economy \u2014 it\u2019s the right thing for shareholders, too\" \/>\n<meta property=\"og:description\" content=\"Banks need to get their acts together when it comes to SME lending \u2014 not because it\u2019s the right thing to do for the economy (it is), but because it\u2019s the right thing to do for their shareholders. An AUC study we noted this morning said the solution lies (to varying degrees) in NBFS players, [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/21\/bank-lending-to-smes-isnt-just-the-right-thing-for-the-economy-its-the-right-thing-for-shareholders-too\/\" \/>\n<meta property=\"og:site_name\" content=\"EnterpriseAM Egypt\" \/>\n<meta property=\"article:published_time\" content=\"2021-02-21T13:31:11+00:00\" \/>\n<meta name=\"author\" content=\"enterpriseam admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"enterpriseam admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/21\/bank-lending-to-smes-isnt-just-the-right-thing-for-the-economy-its-the-right-thing-for-shareholders-too\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/21\/bank-lending-to-smes-isnt-just-the-right-thing-for-the-economy-its-the-right-thing-for-shareholders-too\/\"},\"author\":{\"name\":\"enterpriseam admin\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#\/schema\/person\/ca597032db7e4db868359c123cec256d\"},\"headline\":\"Bank lending to SMEs isn\u2019t just the right thing for the economy \u2014 it\u2019s the right thing for shareholders, too\",\"datePublished\":\"2021-02-21T13:31:11+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/21\/bank-lending-to-smes-isnt-just-the-right-thing-for-the-economy-its-the-right-thing-for-shareholders-too\/\"},\"wordCount\":297,\"publisher\":{\"@id\":\"https:\/\/enterpriseam.com\/egypt\/#organization\"},\"keywords\":[\"EnterprisePM\",\"PARTING SHOT\",\"SMEs\"],\"articleSection\":[\"PARTING SHOT\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/21\/bank-lending-to-smes-isnt-just-the-right-thing-for-the-economy-its-the-right-thing-for-shareholders-too\/\",\"url\":\"https:\/\/enterpriseam.com\/egypt\/2021\/02\/21\/bank-lending-to-smes-isnt-just-the-right-thing-for-the-economy-its-the-right-thing-for-shareholders-too\/\",\"name\":\"Bank lending to SMEs isn\u2019t just the right thing for the economy \u2014 it\u2019s the right thing for shareholders, too - 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