Fostering SME Growth and Success: How Issuing Banks Can Exert Influence
Small and medium-sized enterprises (SMEs) serve as the backbone of the modern economy across the CEMEA region, employing millions and contributing to more than half of regional GDP1.
However, despite leaps in technological development, many enterprises still struggle with financial access, hindering their growth. Visa's latest SME Megatrends report investigates this phenomenon and delves into both the challenges and opportunities facing SMEs, as well as the megatrends characterizing their development across the region.
The report is a pivotal resource for regional issuing banks, providing insights into the unique needs of SMEs and highlighting opportunities for growth and development. By tailoring their offering regionally, banks can leverage these megatrends to enrich the digital payments ecosystem and cultivate sustainable economic growth. The key findings from the report pinpoint several areas where issuing banks can exert a significant influence:
- Streamlining Financial Services: Broadly across the CEMEA region we noticed a prevailing demand for streamlined and tailored financial services relevant to the specific needs and challenges presented by the diverse CEMEA geographies.
- Easing Access to Funding: Offering alternative lending solutions and streamlining the loan approval process can address a critical gap for SMEs.
- Empowering through Access to Social Media and E-commerce: We see increasing use of social media and e-commerce platforms to market products and access new customer segments.
- Facilitating Digital Transformation: Customer convenience also remains paramount evidenced by the acceleration of digital capabilities such as the adoption of contactless and mobile payments.
- Expanding Opportunities via B2B Marketplaces: Finally, we have seen SMEs expand and streamline their operations via B2B marketplaces which allow for direct contact with suppliers and buyers.
Diverse landscape of the CEMEA region necessitates the customisation of solutions
This being said, there are considerable regional nuances which indicate variable levels of maturity and adoption of these trends. To meet the needs of businesses across a wide range of geographies, issuers need to customise their solutions. Guided by the insights of the report, issuing banks can offer more tailored solutions and customise business models to effectively acquire and serve regional SME clients.
To elaborate on a few of these variations, in the UAE, we see the prioritization of SME-friendly banking experiences, accessible financing, digital commerce support and support for better employee benefits. Conversely, in Nigeria SMEs are increasingly seeking formal financial services and easier credit access. Digital integration is also vital, as online presence is growing though complexities persist, and real-time payments are also gaining momentum. More different still, the Serbian SME market indicates a preference for more sophisticated financial platforms which can streamline their business operations. They have a mature online consumer base of some 50%+ of consumers who they want to reach with proprietary online functions, and they are also taking a stronger position on sustainable business practices.
Understanding SME needs and behaviors is crucial for developing targeted strategies.
The variable requirements across the CEMEA region illustrate the need for dedicated solutions appropriate to these diverse and dynamic economic landscapes. Understanding SME needs and behaviors is crucial for developing targeted strategies. By analyzing data and insights, as found in Visa’s SMEs Megatrends report, issuers can align their offerings with their SME requirements.
Effective engagement with SMEs is vital
Effective engagement with SMEs through relevant communication channels and educational resources is also vital, as is collaboration with ecosystem partners, including fintechs, merchants, and regulators. These partnerships can facilitate synergies, address challenges, and foster opportunities, ensuring that SMEs have the tools and support necessary to thrive.
Visa is dedicated to equipping issuing banks with the tools they need to tap into the SME market, promoting inclusive and sustainable regional development. A portfolio of innovative products tailored to SME needs, from business cards to digital commerce tools is available, supported by consulting, marketing, and education services. Visa also collaborates with ecosystem stakeholders like governments and fintechs to foster an environment conducive to SME success.
The opportunities that lie ahead
The challenges faced by CEMEA’s SMEs can serve as catalysts for innovation and growth. Equipped with the insights and technology to cultivate these businesses, issuing banks have the opportunity to foster their growth and mutual success. There is an opportunity to reshape the SME landscape, with Visa championing a future of digital empowerment and economic advancement.
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1Visa Spotlights Podcast: Visa SME Megatrends Report, 2024
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