SMALL MEDIUM ENTERPRISES

Small Medium Enterprises



Small Medium Enterprises

First mover advantage in financing the SME's: Most banking organizations ? financing tend to be marginalized by the mainstream retail and corporate banking operations. Though many in financial services chant the mantra of finding a niche and resting on core competency ? Sasfin has already taken a lead choosing and catering for the small to medium to businesses and entrepreneurs (Annexure 3). Sasfin is unique in filling a space in the market ? focusing on entrepreneurial businesses. According to CEO Roland Sassoon “it's this space that's been left open by the big banks” The big banks are not in a position to cater for the financial needs of a rapidly growing business.

Experienced and capable credit team: Sasfin's capable credit team enabled it to manage risk and avoid bad debts ? which are experienced by the other banks of its sizeDecision-making: Being a small bank they are able to approve deals within 24 hours. The bigger banks due to their sizes take longer than that.

Sasfin has developed a lot of skills and experience in dealing with emerging entrepreneurs. However their customer base is largely concentrated in certain traditional communities (e.g. the Jewish community). They have not been able to take advantage of their skills to grow their market share extensively beyond these communities.

RECOMMENDATIONS

The small to medium businesses market that Sasfin Bank is targeting ? is big enough to make Sasfin profitable. It is also a fast growing market because the South African government actively encourages the growth of this sector. The major banks have also not created a good presence in this market ? as they have been wary of the risks.

The current growth in the SME sector is enough to encourage the major banks to find effective ways of capturing bigger shares of the ...