A service delivery framework to unlock the revenue potential of the SME segments of commercercial banks in South Africa
- Authors: Mahlati, Mphenduli Mncedi
- Date: 2018
- Subjects: Small business -- Finance , Financial services industry -- Information technology Banks and banking Technological innovations
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: http://hdl.handle.net/10948/31633 , vital:31639
- Description: Small and Medium sized Enterprises (SMEs) are a vital driver to the world economy. They provide more than 60% of overall employment globally and approximately 80% of jobs in developed economies. This segment however remains underserved by banks who have struggled to serve SMEs effectively. Nevertheless banks are still perfectly placed to capture the needs of SME customers and to provide them with greater value adding services that address their needs. However, this must be done in a cost-effective manner to ensure long-term portfolio and banking profitability. SME Banking faces several challenges centred on the high cost to serve and profitability. For the banking sector to overcome these challenges and still meet increasing and changing customer needs, significant investment in digital technology is required. The literature reviewed identified that in order to unlock the revenue potential embedded within the SME segment; banks need ground-breaking solutions to solve their revenue and profitability conundrum. This study mentions that such solutions will need to be focused around placing banks as market enablers, by way of providing SMEs with a growth platform and not just financial transaction services. The study also identified a hybrid service delivery model and a digital ecosystem approach to SME banking as being pivotal to unlocking the revenue potential embedded within the segment. Through a digital ecosystem approach, banks can leverage their intra and inter banking network to assist SMEs to grow their businesses. In the process, this will serve as a way of increasing penetration into this underserved segment. In addition, such an approach to banking necessitates an acceptance of how interconnected business relationships have the capacity to enable business growth and subsequently to address SME banking risk. To also consider that banks in South Africa continue to view SMEs as being too risky and costly to serve. This study attempts to address this perceived riskiness by presenting a service delivery framework, which consists of key factors that would influence the revenue potential of the SME segments of Commercial Banks in South Africa. The empirical part of the research evaluated banking official’s awareness and understanding of key concepts that is likely to influence their views with regards to the revenue potential of the SME market.
- Full Text:
- Date Issued: 2018
- Authors: Mahlati, Mphenduli Mncedi
- Date: 2018
- Subjects: Small business -- Finance , Financial services industry -- Information technology Banks and banking Technological innovations
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: http://hdl.handle.net/10948/31633 , vital:31639
- Description: Small and Medium sized Enterprises (SMEs) are a vital driver to the world economy. They provide more than 60% of overall employment globally and approximately 80% of jobs in developed economies. This segment however remains underserved by banks who have struggled to serve SMEs effectively. Nevertheless banks are still perfectly placed to capture the needs of SME customers and to provide them with greater value adding services that address their needs. However, this must be done in a cost-effective manner to ensure long-term portfolio and banking profitability. SME Banking faces several challenges centred on the high cost to serve and profitability. For the banking sector to overcome these challenges and still meet increasing and changing customer needs, significant investment in digital technology is required. The literature reviewed identified that in order to unlock the revenue potential embedded within the SME segment; banks need ground-breaking solutions to solve their revenue and profitability conundrum. This study mentions that such solutions will need to be focused around placing banks as market enablers, by way of providing SMEs with a growth platform and not just financial transaction services. The study also identified a hybrid service delivery model and a digital ecosystem approach to SME banking as being pivotal to unlocking the revenue potential embedded within the segment. Through a digital ecosystem approach, banks can leverage their intra and inter banking network to assist SMEs to grow their businesses. In the process, this will serve as a way of increasing penetration into this underserved segment. In addition, such an approach to banking necessitates an acceptance of how interconnected business relationships have the capacity to enable business growth and subsequently to address SME banking risk. To also consider that banks in South Africa continue to view SMEs as being too risky and costly to serve. This study attempts to address this perceived riskiness by presenting a service delivery framework, which consists of key factors that would influence the revenue potential of the SME segments of Commercial Banks in South Africa. The empirical part of the research evaluated banking official’s awareness and understanding of key concepts that is likely to influence their views with regards to the revenue potential of the SME market.
- Full Text:
- Date Issued: 2018
Financial constraints of SMMEs in the Fezile Dabi District Municipality, Freestate Province
- Authors: Mashiyi, Gcobani
- Date: 2018
- Subjects: Small business -- Finance , Business enterprises -- Finance Development credit corporations
- Language: English
- Type: Thesis , Masters , MPhil
- Identifier: http://hdl.handle.net/10948/22672 , vital:30053
- Description: SMMEs have been identified as key role players in economic growth and development in South Africa. SMMEs contribute fifty two percent in the Growth and Domestic Product. Subsequently to that there various interventions by South African Government to support small enterprise developments with intentions to address financial constraints faced by SMMEs emanating from lack of access to funding. Despite these efforts or interventions by South African Government SMMEs are still confronted by financial constraints that if difficult for them to sustain themselves. Financial Institutions are still reluctant to avail finances to SMMEs because of their risk profile being in the new venture category. Tedious and complex funding application processes, complex funding criteria and geographical location of SMMEs prohibits SMMEs in accessing funding from Development Finance Institutions. To do this a survey existing literatures was viewed and analysed. Viewed and analysed literature indicated various constraints faced by SMMEs in South Africa. Among factors contribute to SMMEs financial constraints are the size and capacity of SMMEs serves as stumbling blocks to financial access, extent to which the complex requirements on the funding application forms affect access to funding by SMMEs in the District Municipality and geographic location of SMMEs effects on their access to funding from DFIs.
- Full Text:
- Date Issued: 2018
- Authors: Mashiyi, Gcobani
- Date: 2018
- Subjects: Small business -- Finance , Business enterprises -- Finance Development credit corporations
- Language: English
- Type: Thesis , Masters , MPhil
- Identifier: http://hdl.handle.net/10948/22672 , vital:30053
- Description: SMMEs have been identified as key role players in economic growth and development in South Africa. SMMEs contribute fifty two percent in the Growth and Domestic Product. Subsequently to that there various interventions by South African Government to support small enterprise developments with intentions to address financial constraints faced by SMMEs emanating from lack of access to funding. Despite these efforts or interventions by South African Government SMMEs are still confronted by financial constraints that if difficult for them to sustain themselves. Financial Institutions are still reluctant to avail finances to SMMEs because of their risk profile being in the new venture category. Tedious and complex funding application processes, complex funding criteria and geographical location of SMMEs prohibits SMMEs in accessing funding from Development Finance Institutions. To do this a survey existing literatures was viewed and analysed. Viewed and analysed literature indicated various constraints faced by SMMEs in South Africa. Among factors contribute to SMMEs financial constraints are the size and capacity of SMMEs serves as stumbling blocks to financial access, extent to which the complex requirements on the funding application forms affect access to funding by SMMEs in the District Municipality and geographic location of SMMEs effects on their access to funding from DFIs.
- Full Text:
- Date Issued: 2018
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