Advisory, Management and Capacity Building Solutions

Developing Small and Medium Enterprises

Developing a successful SME banking business is a difficult task, especially in Emerging Markets. Lack of reliable market and company information, and the difficulty of building a sound SME loan portfolio, poses serious challenges. However, the rewards of better SME banking are potentially huge, not just for banks and the SMEs themselves, but for the economy as a whole. BAZ Consulting has practical experience in providing pragmatic solutions to some of the problems that banks and organizations face, in this market, to help them build strong and profitable SME banking businesses.

Consulting services for SME expansion are provided to small- and medium-scale enterprises which enter upon their growth period or which are trying to set their development targets. SMEs should grow in a planned manner in order to be able to compete hold a place in larger markets. Basic preparations such as marketing, production, management required by growth should be carried out. Growth plan should be consistent with the establishment’s capabilities.

Why target the SME market?

Whilst there are problems to be solved, investment in developing a strong SME banking business remains a priority strategy for most banks for the following reasons.

Baz approach to SME banking

BAZ is a leader in working with banks around the globe; particularly in emerging markets. We develop and deliver viable and profitable SME banking models through practical, hands-on, consulting. In a world of sample-checked data, and misinformation, we have the experience to help banks achieve realistic solutions to addressing SME market sustainably.

Our clients particularly value our focus on implementation, rather than just strategy development. BAZ is a consulting firm which understands these business challenges and we can assist across a wide range of SME banking issues. If you find some of these ideas and approaches useful or interesting, we would be happy to discuss with you the unique challenges of your own organization, and how we might be able to assist.

Market Understanding

The SME market is not homogeneous, but covers a huge variety of different type of enterprise with widely varying financial needs. Identifying which segments of the market are most attractive to a bank, and how best to address their needs, will help ensure the success of the business. BAZ emphasizes the following elements when working with SME Banking:

Portfolio Management

Underpinning almost all elements of a successful approach to SME banking is the concept of active portfolio management. At its simplest, this means that management has the necessary quality and quantity of timely information on the Bank’s SME customer’s to understand how they are performing on an aggregate basis, and to forecast performance under different scenarios. More sophisticated approaches support even more granular and effective marketing and risk management strategies which can yield excellent financial performance. Whilst the portfolio management capacity will evolve over time, we suggest early thought is given to some of the fundamentals including:

Segmentation Strategy

It is important to select carefully which parts of the SME market you wish to target with your SME banking proposition. BAZ can help you develop your segmentation strategy starting from the following principles:

Risk Management

Baz Risk consulting services aims to conduct necessary examinations and analyses according to the sector and market in which the establishment is included and to eliminate factors that may arise any risk.

Marketing Strategy

BAZ has experience in developing marketing strategies for the Corporate, SME, and Retail segments. A marketing strategy for SMEs in particular, might need to consider some or all of the following elements:

Customer Understanding

Customer understanding is much more than just asking what your customer wants. More than likely they will tell you they simply want more credit at lower cost, which is usually unacceptable to the bank! Good customer understanding, however, gives the bank an advantage in negotiating a favorable compromise with the customer that is ultimately mutually beneficial.

The BAZ approach emphasizes

Product Development

Good product development means mastering the art of keeping being cost efficient simultaneously adhering to the financial services required by the customers to make them feel special. With our decade experience in customer management and product development for the SME market, BAZ can offer support in the following areas:

Product Range

Banks can boost the profitability of SME customers by having a range of products which truly responds to customer needs, including liability-side, cash management, trade finance and shorter-term secured asset finance. SMEs can markedly improve profit retention and capitalization through a well-structured cashflow solution, which is ideal for both the customer and their bankers.

Product Development Process

Getting new and innovative products in the market quickly and effectively is a core competence of any successful bank. Banks are required to review their existing product portfolio, design and launch new products to fill the gaps, and also put in place, methodologies to design, test and launch products, profitably and with a minimum of risk.

Agricultural and rural finance

BAZ consulting offers technical assistance and support to a wide range of market stakeholders. We extend our services to private companies, business associations and collaborate with farmer cooperatives to improve their functioning to reduce the risk of loss and by providing modern solutions. We do not overlook the aspect of accessibility and utility and are always working on ways to make the sector live up to its potential. We have had experience in developing new and efficient distribution networks and resilient and responsive organizations. Our work overarches a wide array of sub-sectors like dairy farming and livestock with focus on cross-cutting sectors such as input supply, agri-credit and mechanization.

The BAZ take on Agriculture

The Agriculture sector although often ignored, forms a chunk of economies world over and is the biggest economic job provider of Pakistan. It is a lamentable fact that in spite of this great potential, the agriculture sector is lacking in suitable finance facilities. BAZ consulting knows the financial problems of the farmers who depend on small areas of land to support their families and get on with day to day life without ever thinking about the profit-motive of business.

Let’s Get Started

If you have any query, feel free to contact us on the given phone number or simply fill out our online form.