Why Banks in Emerging Markets Are Increasingly Providing Non-financial Services to Small and Medium Enterprises

Banks in emerging markets are increasingly providing non-financial services to their SME clients, typically consisting of information sharing, training and consultancy. This study, published by IFC in partnership with the Austrian Government, is th...

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Bibliographic Details
Main Author:	International Finance Corporation
Format:	Working Paper
Language:	English en_US
Published:	Washington, DC 2017
Subjects:	ACCESS TO FINANCE ACCESS TO FINANCIAL SERVICES ACCESS TO INFORMATION ACCOUNTING AFFILIATES ASSISTANCE TO BUSINESSES AUDITING B2B BALANCE SHEET BANK ACCESS BANK ACCOUNT BANK ASSETS BANK BRANCHES BANK COMPETITION BANK FINANCING BANK LENDING BANK LOAN BANK LOANS BANK MANAGEMENT BANK OFFICIALS BANK SERVICES BANKING INDUSTRY BANKING SECTOR BANKING SERVICES BANKS BEST PRACTICES BUSINESS ADVICE BUSINESS ADVISORY BUSINESS ASSESSMENT BUSINESS ASSESSMENTS BUSINESS CENTER BUSINESS CENTERS BUSINESS DEVELOPMENT BUSINESS EDUCATION BUSINESS ENVIRONMENT BUSINESS IDEA BUSINESS MANAGEMENT BUSINESS MENTORS BUSINESS MODEL BUSINESS MODELS BUSINESS NEEDS BUSINESS OPERATIONS BUSINESS OWNERS BUSINESS PARTNERS BUSINESS PERFORMANCE BUSINESS PLAN BUSINESS PLANNING BUSINESS PLANS BUSINESS PROBLEMS BUSINESS RELATIONSHIPS BUSINESS RESOURCES BUSINESS SERVICE BUSINESS SOFTWARE BUSINESS STARTUP BUSINESS STRATEGY BUSINESS TOOLS BUSINESS TRAINING BUSINESS-TO-BUSINESS CALL CENTER CAPACITY BUILDING CAPACITY-BUILDING CASH FLOW CASH MANAGEMENT CERTIFICATE COLLATERAL COMMERCIAL BANKS COMPETITIVE ADVANTAGE COMPETITIVENESS CONSULTING SERVICE CONSULTING SERVICES CORPORATE BANKING CORPORATION COST-SHARING CREDIT CONSTRAINTS CREDIT CONTROL CREDIT GAP CREDIT REPORTS CREDIT RISK CREDIT-SCORING CREDITS CUSTOMER BASE CUSTOMER LOYALTY CUSTOMER SERVICE DATA ANALYSIS DAY-TO-DAY MANAGEMENT DELINQUENCY RATE DELINQUENCY RATES DEVELOPMENT BANK ECONOMIC DEVELOPMENT ELECTRONIC MEDIA EMERGING MARKETS EMPLOYEE EMPOWERMENT ENTERPRISE RESOURCE PLANNING ENTERPRISE SECTOR ENTREPRENEURS ENTREPRENEURSHIP ENTRY BARRIERS EXTERNAL FINANCING FACTORING FARMER FINANCIAL ANALYSIS FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FINANCIAL NEEDS FINANCIAL PRODUCTS FINANCIAL RESOURCES FINANCIAL SERVICE FINANCIAL SERVICES FINANCIAL SKILLS FINANCIAL SUPPORT FINANCIAL SUSTAINABILITY FINANCIAL TOOL FINANCIAL TOOLS FINANCING NEEDS FIRMS FOREIGN TRADE GENDER GEOGRAPHIC REGION GEOGRAPHIC REGIONS GLOBAL MARKETS GROWTH STRATEGIES HUMAN RESOURCES IMAGE IMMEDIATE ACCESS INFORMATION ASYMMETRY INFORMATION DISSEMINATION INFORMATION SERVICES INFORMATION SHARING INFORMATION TECHNOLOGY INSURANCE INTEREST RATES INTERNATIONAL BANKS INTERNATIONAL FINANCE KEY CHALLENGES LEGISLATION LIMITED ACCESS LOAN APPLICANTS LOAN APPLICATIONS LOAN DELINQUENCY LOAN GUARANTEES LOAN REQUEST LOCAL GOVERNMENT MANAGEMENT INFORMATION SYSTEMS MANUFACTURING MARKET DEMAND MARKET DEMANDS MARKET INFORMATION MARKET OPPORTUNITIES MARKET OPPORTUNITY MARKET PRICES MARKET RESEARCH MARKETING MEDIUM ENTERPRISE MEDIUM ENTERPRISES MICRO BUSINESS MICROFINANCE MICROFINANCE INSTITUTIONS MUTUAL FUNDS NATIONAL BANK NETWORKING OPPORTUNITIES NEW BUSINESS NEW MARKET NEWSLETTERS ONLINE BUSINESS OPERATIONAL COSTS OUTREACH PHONE PHONE LINE POOR ACCESS PRIVATE BANKING PRIVATE SECTOR PRODUCT DESIGN PRODUCT DEVELOPMENT PRODUCTION CAPACITY PRODUCTIVITY PROFITABILITY PUBLIC BANK PURCHASING POWER REPAYMENT RESULT RESULTS RETENTION RETURN ON INVESTMENT RISK MANAGEMENT SELF-HELP SERVICE PROVIDERS SMALL BANKS SMALL BUSINESS SMALL BUSINESS BANKING SMALL BUSINESSES SME SME CLIENT SME CLIENTS SOCIAL RESPONSIBILITY SPREADSHEETS START-UP SUPPLIERS SUPPLY CHAIN SUPPORT FOR WOMEN TAX CODE TAX LEGISLATION TAXATION TECHNICAL ASSISTANCE TECHNICAL KNOWLEDGE TELECOMMUNICATIONS TELEPHONE TELEVISION TIME DEPOSITS TIME PERIOD TRAINING CENTERS TRAINING COURSES TRANSACTION TRANSACTION COSTS TREASURY BILLS USERS USES VIDEO VIDEOS WEB WEB PORTAL WEB SITE WEB SITES WHITE PAPERS WOMEN BUSINESS OWNERS WOMEN ENTREPRENEURS WOMEN IN BUSINESS WORKING CAPITAL
Online Access:	http://documents.worldbank.org/curated/en/988801468163454790/Why-banks-in-emerging-markets-are-increasingly-providing-non-financial-services-to-small-and-medium-enterprises http://hdl.handle.net/10986/27115

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Summary:	Banks in emerging markets are increasingly providing non-financial services to their SME clients, typically consisting of information sharing, training and consultancy. This study, published by IFC in partnership with the Austrian Government, is the first to explore reasons behind this trend, finding that banks' key motivations include attracting and retaining customers, and strengthening portfolio quality. The report consists of an overview followed by case studies of three banks, namely Türk Ekonomi Bankasý (TEB), Standard Chartered Bank (SCB), and ICICI Bank. It is estimated that there are 365 to 445 million formal and informal micro, small, and medium enterprises, with a subset of 25 to 35 million formal SMEs, in the developing world. Of these, 70 percent do not use external financing from financial institutions, although they are in need of it. Approximately 85 percent suffer from credit constraints.

Why Banks in Emerging Markets Are Increasingly Providing Non-financial Services to Small and Medium Enterprises

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