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May 2013

May 2013. SME Access to Finance - Global. 50-60% of MSMEs in the world are either un-served or underserved. The MENA region as a whole provides better access to finance for SMEs, but with sizeable differences between individual countries. Number & percent of MSMEs Unserved or underserved:-.

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May 2013

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  1. May 2013

  2. SME Access to Finance - Global 50-60% of MSMEs in the world are either un-served or underserved. The MENA region as a whole provides better access to finance for SMEs, but with sizeable differences between individual countries. Number & percent of MSMEs Unserved or underserved:- Source: IFC

  3. Small Business – The Big Opportunity SME LOANS TO TOTAL LOANS Potential SME lending opportunity 60 bln SAR in KSA Source: Union of Arab Banks/World Bank Financial Flagship Report Source: *Claims on Pvt Sect. SAMA April monthly Bulletin

  4. 4Q12 2011 1Q12 2Q12 1Q2013 2Q2013 2010 Q2 13 SHB and SMEs – The Journey Key Facts Number of Dedicated Staff 40 Dedicated Business Centers 7 Number of Relationships 4,500+ SME Banking wins 2 Best SME Awards Parameter Based credit assessment SME Credit Cards launched 1st Bus Centre open in WA & EA Total 7 Centers fully operational Start roll-out of dedicated SME Business Centers 1st Bus Centre open in Riyadh SME Income Statement & B/S separation Segmentation & MIS capabilities launched SME Relationship teams present in three regions Regional managers of SME business on board SME Risk Acceptance Framework Initiation of separate SME Credit Risk Policies/Procedures/ dedicated Ops Comprehensive plan covering business model, risk management etc

  5. SHB’s Lessons Learned Geographically Dispersed Clients Dedicated SME branches – hub and spoke Target Operating Model Portfolio / Scale – Process redesign Access to Reliable Data SIMAH Taqeem Customer Evaluation Template based assessment SME Banking – not SME Lending Holistic banking for SME and owner

  6. Conclusions • Increasing access to finance for SMEs requires a joint effort of many stakeholders, including the banks, the regulator, the government and industry groups • For banks, SME banking presents a viable business proposition, in addition to it being a social obligation • For SME banking to be a viable business proposition, banks need to redesign their policies, procedures and processes, across risk, operations, IT and front office • The regulator and the government can help in providing the enabling infrastructure such as an effective credit bureau and a functioning guarantee scheme, and in considering preferential capital treatment for portfolios of SME exposures • Industry groups such as the Chambers of Commerce could help in providing continuous education and development and training of SMEs SME Banking is a genuinely different business, which, if managed in the right way can be very beneficial for the SMEs, the Banks, and the development of the country

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