Authors: Kellogg, Clifton G.; Beavers, Phil; Balmus, Aurica; Fogel, Anna

Source: Enterprise Development and Microfinance, Volume 22, Number 1, March 2011 , pp. 59-74(16)

Publisher: Practical Action Publishing

Abstract:

Do banks that focus on small businesses in developing economies possess distinguishing attributes? The team studied four leading small business banks in developing economies and compared their practices with the SME banking value chain in the IFC SME Banking Knowledge Guide. The case studies confirmed most elements in the value chain; however, three additional overriding success drivers were observed: 1) management commitment to small business customers; 2) loan officers' skills in outreach to customers and in preparation of credit memos; and 3) the creation of efficiencies in lending. At the same time, other activities in the banking value chain proved less crucial to these banks' success: 1) bundling and cross-selling non-lending products; 2) the separation of business development and risk management functions; and 3) the use of customer and profitability data to fully refine their banking model. Further case studies and benchmarking will help the industry continue to refine its banking models.

Keywords: SMALL BUSINESS BANK; EQUITY BANK; BRAC BANK; TBC BANK; CROSS-SELLING; MARKET OUTREACH; EFFICIENCY

Document Type: Research article

DOI: http://dx.doi.org/10.3362/1755-1986.2011.007

Publication date: 2011-03-01

More about this publication?

• Enterprise Development & Microfinance provides a forum for those involved in the design and implementation of enterprise development and microfinance programmes in developing countries. With themes such as the sustainability of microfinance institutions, the impact of poverty on clients and producers and value chain development it is essential reading for managers of projects, providers of technical assistance, consultants to projects, policymakers and the staff of donor agencies.

  Formerly Small Enterprise Development journal

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