Rohit Garg, Head of Business Banking at Mashreq discusses the challenges in the SME market as well as the best way to cater to them.
In light of current economic conditions and the general reluctance of banks in giving out loans to businesses, what is Mashreq’s view on the matter?
Mashreq, as one of the oldest banks in the UAE, has supported small businesses for a long time. We continue to lend to small business with viable business models that have the ability to repay the debt they undertake.
With the credit bureau and the recent experience of the 2014 meltdown in the small and medium enterprise (SME) segment, lending has become more prudent across the industry and Mashreq is no exception.
How much of the business banking sector makes up Mashreq’s total portfolio? How has this changed in the last two years?
The SME business for Mashreq enjoys a market share of approximately 12 per cent and we continue to maintain that. We were recently awarded the Agility Award for the Best SME Business in the UAE and we continue to invest and grow our SME portfolio.
What challenges do banks face in addressing the financing needs of businesses in today’s landscape?
Today, assessing risk remains the main challenge for banks. Risk is not only limited to credit risk and compliance but also extends to international regulation as a key risk as well. The geopolitical landscape also affects the continuity of business and credit decisions.
What do you think is the best way to service businesses in the region?
Mashreq has always been a customer- centric organisation and we believe in differentiation through service. The best way to deliver this service is to move to a digital platform. We have been very successful in leveraging our digital platforms and approximately 90 per cent of all our transactions in this segment are originated digitally.
This provides great convenience and choice to customers at a reduced cost. We therefore continue to augment the digital platform.
Masheq’s focus on start-ups
SMEs and start-ups are the backbone of any economy. Innovation is at the core of Mashreq’s business and the bank continues to invest in initiatives that has the potential to not only deliver benefits for the business and its customers but also support the overall start-up ecosystem in the UAE.
Mashreq’s products and services are carefully designed to cater to the young aspiring businesses as well as well-established entrepreneurs in the region. There is a dedicated focus on SMEs within Mashreq and tailored products and services are built to service these customers.
In line with this objective, Mashreq has partnered with DIFC in the Fintech Hive start-up boot camp where conglomeration of new start-ups had presented their product and business ideas. The senior management at Mashreq further helped these start-ups refine their ideas and mentored them in conducting a proof of concept with their product.
Mashreq is also one of the two banks to sponsor the DTEC entrepreneur acceleration programme at Dubai Silicon Oasis where the bank provided insights into financial management and banking processes to budding entrepreneurs. In addition to the above, Mashreq has a strategic alliance with DED and has created a tailor-made product for DED E-Trader customers.
These E-Trader entrepreneurs mostly trade on social media platforms and requires swift transaction with minimum commitments. Considering these requirements, Mashreq has created a specific product to support DED E-Trader customers.
Furthermore, Mashreq has introduced several new technologies with a keen focus on SMEs. Some of the bank’s concepts include Interactive Teller Machines, Self-service Kiosk and Bulk Cash Deposit Machines, amongst others.
These digital technologies are not only equipped to support faster transactions for customers but are also leveraged heavily within the organisation to process and automate the bank’s internal processes. These innovative services are put in place to ensure that we are able to deliver quality services to our discerning customers including SMEs.
Mashreq recognises the importance of small businesses and consequently has always been at the forefront of introducing innovative ideas to support its retail and SME customers.