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Micro & SMEs banking = a REAL opportunity for Micro-Finance Institutions and, ESPECIALLY, for mainstream banking

Education
2. Sep 2015
Unfortunately, today, the financing needs of Micro & SMEs as well as their needs for advice, banking products and services are huge and...growing but...UNMET by mainstream banking thus generating a rise of the unemployment rate and consequently of the poverty rate.
Micro-Finance Institutions are one IMPORTANT alternative finance but need INCREASED and CONTINUOUS support and funding from governments and international financial organizations.

Sadly, for a very long time, most of the banks are reluctant to strategically tackle the Micro & SMEs lending (including their needs for advice, banking products and services ) as they continue to think this is an unprofitable business segment and to seek SHORT-TERM profit with large companies.

Personally I am looking forward (in the VERY near future!!) to a RADICAL strategical change of this abnormal and absurd situation, when MOST of the banks all over the world will START considering the Micro & SMEs banking (lending, savings and other products and services) as a very profitable target segment with a very manageable risk feature (see the automated credit scoring implementation for Micro & SMEs).

Obviously this would trigger a radical and strategic change / improvement / refinement of banks' policies and system as well as a massive and comprehensive Micro & SMEs banking training for the bank staff.

Why do I see the need for a such strategic and radical change?

There are many reasons but the most critical one is that banks are currently facing increased challenges (especially the decreasing inflation and interest rates as well as the excess market liquidity) that are radically shrinking their profit margin. Therefore the banks need to RAPIDLY deepen their strategic focus on reaching a critical volume of Micro & SME banking (including lending) portfolio that generates enough revenues to cover their financial and operational costs and, implicitly, to ensure the overall bank profitability.

CONCLUSION
Micro & SMEs banking = a REAL opportunity for MFIs and, ESPECIALLY, for mainstream banking

A BON ENTENDEUR, SALUT!