innovation in sme finance
DESCRIPTION
Presentation by Matt Gamser, Sao Paulo April 2013.TRANSCRIPT
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Innovation in SME Finance
Matthew GamserHead, SME Finance Forum
Sao Paulo, April 2013
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Achievements to date
News/reports on SME finance with daily feeds
Growing LinkedIn group: over 1300 members
Promotion of innovative approaches to promote SME finance/SME Finance Challenge
Data sharing/harmonization Policy dialogue (G20/AFI) Impact analysis Women’s Finance Hub launched 21
April 2013!
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Our TeamMatthew Gamser, [email protected]
Hourn Thy, Operations & Technical [email protected]
Nadia Afrin, KM & Web [email protected]
Minerva Kotei, Women’s Finance [email protected]
Nothando Nyathi, [email protected]
Support for the SME Finance Forum:
Support for the G20 Finance Innovation Fund provided by:
Donors
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82-86% (~ 0.8-0.9 Tn) of total credit gap of formal SMEs in emerging markets is represented by formal SMEs that already have a deposit account
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managed well, SME Banking can be very profitable…
Key observations• ROE can be very attractive (up to 25-35%)• Margin compression inevitable but can be
negated by establishing a “total wallet” P&L• Key profit drivers are typically deposits and
transaction banking, representing between 50-60% of total SME business profitability
• Need to take a 5-year view of product profitability
“We want to double in 3 years. Returns are the best in the Group. Risk-returns are now twice as high as all our consumer banking businesses”
Global Product Head, SME Banking Standard Chartered Sept.2010
Faster Revenue Growth………..
Higher RoA’s………..
6SME
Finance Gap
Challenges in SF
IFC – What &
How
IFC and G-20
IFC Footprin
t
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Performance in SME Banking can be highly volatile if the right capabilities are not put in place…
SME ROA
PERCENT
SME Banking rewards those with the right capabilities in placeSource: Mckinsey
7SME
Finance Gap
Challenges in SF
IFC – What &
How
IFC and G-20
IFC Footprin
t
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Myths and Opportunities #1
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Myths and Opportunities #2
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Myths and Opportunities 3
Myth Opportunity
3. It’s all about banks Banks matter, but so do partnerships - with real sector large firms, and others.
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The Way Forward - Potential of both relationship and transactional-based strategies
and
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On the Web at www.smefinanceforum.org
LinkedIn Group: SME Finance Forum
Twitter: @SMEFinanceForum