Services to assist SMEs in daily admin tasks
The government has placed a high priority on promoting and enabling the growth and development of the SME sector in South Africa but financial pressure on this sector often mean that the owners have to wear many other hats, as employing admin specialists is beyond their scope. Banking services can assist in some of these tasks, reducing the burden.
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Against the current backdrop of negative growth in employment creation by both large enterprises and the government sector, SMEs certainly have a major socio-economic development role to play in South Africa but between 60% and 70% of South Africa's small businesses fail in the first two years of their existence.
Leveraging its expertise, a bank can offer banking products and value-adding services to ease the administrative burden on these businesses and maximise their chances of success.
The rapid uptake of technology, both in business and banking, offers financial services providers a unique opportunity to become such business partners without the need for massive investments.
Innovations in the business banking space shows that technology can be harnessed and add significant value to small and medium business banking clients.
Using online banking as the primary point of access, SME clients can benefit from access to vital services from online accounting and payroll facilities to merchant insight and data services - all available in one place and all designed to simplify the onerous administrative requirements that could otherwise have contributed to the closure of these SME businesses.
Importantly, the role of banks in helping to build such a solid SME foundation does not, and cannot, merely involve processing finance applications from business owners.
The majority of business owners whether they are starting up a new company or expanding an existing one also need practical support, guidance and assistance in the administrative, compliance and day-to-day operational function of their companies. This is where banks are in the perfect position to start thinking of themselves less as credit providers and more as valuable business partners to these SMEs.
Recently, the bank further reduced the administrative and compliance headaches for its business clients by partnering with the dti to provide an automatic CIPC business registration service to clients applying for a business account.
While none of these products or services required rocket science to implement, they offer immeasurable value to small business owners and are proven to enhance the prospects of business success by allowing clients to focus on their core functions instead of being bogged down in time-consuming administrative and compliance responsibilities. This is, we believe, what any business bank has a responsibility to do.
South Africa's banks have a real opportunity to elevate their position on the SME landscape from finance providers to success enablers. It's time for the country's financial institutions to answer the call to deliver more to our country's businesses than just banking.
About Sanjeev Orie
Sanjeev Orie is head of products at FNB Business Banking.
