A recent report has shown that Small and Medium-scale Enterprises (SMEs), around the world, has contributed about $850 billion, which amounts to 25 per cent, to global annual bank earnings. According to the report by a global management consulting firm, McKinsey and Company, a rise in revenue generation for SMEs in Africa was also projected; thus, encouraging African banks to increase their SME banking portfolios.
The contribution to the annual revenue of banks, according to the report, is expected to grow by approximately seven percent annually, over the next seven years. The report also showed that SMEs form the backbone of many economies around the world, particularly Africa.
Corroborating the report findings, experts have said that finding the optimal balance between providing a great customer experience and managing the cost to serve has also proven to be difficult. As a result, many financial institutions have not prioritized SMEs, forsaking the vast potential value and leaving many SMEs feeling that their needs are ignored.
“But now, new customer propositions and better service models, enabled by technology, are creating opportunities for much more lucrative returns. g