Egypt’s Commercial International Bank (CIB) has emerged as not only a very good bank for small and medium-sized enterprises but also a key innovator in a sometimes overlooked area of finance.
The Cairo-based lender’s business banking division caters to SMEs with annual revenues ranging from E£1 million to E£200 million ($53,384 to $10.74 million). It serves over 70,000 companies through a network of 250 experienced relationship managers.
In 2021, the division posted an operating profit of E£1.88 billion, up 20% year on year, with deposits up 41% to E£41.7 billion and assets jumping 93%. SME lending as a share of CIB’s total loan book stood at 18.04% at the end of February 2022, against 12.89% 11 months earlier. CIB also introduced its first dedicated contact centre for SMEs, providing a single point of communication and service for all smaller businesses.
Much of what the bank does well is simple good common sense. CIB’s data analytics team created an early warning system that triggers alerts when a customer, for example, underperforms or threatens to fall into delinquency.
In the awards period, CIB launched the country’s first SME ‘behavioural lending’ product, which helps the lender to make financially sensible decisions – such as whether to raise an overdraft or extend a loan to a specific customer. It also launched a supply-chain financing programme that allows smaller enterprises to access funds at the click of a button.
“The ability to build and execute a strategy that balances risk and reward is the biggest challenge facing SME banking in emerging markets,” notes Rashwan Hammady, the bank’s head of retail segments and products. “Using advanced analytics for revenue management, granular customer segmentation as well as proactive data-based risk models has been the true differentiation for CIB’s SME business strategy. Another critical success factor is the culture we have across functions that fosters innovation while having clear accountabilities for each individual.”
Another initiative is the bank’s SME academy, an internal college that educates relationship managers about the financial stresses and complexities of starting and running a small business – and how valuable the most successful of these entrepreneurs will be to the bank in the years to come. The process involves several exams designed to test aptitude and interpersonal skills when dealing with smaller firms.
So far, 103 relationship managers have graduated from the academy.
CIB also unveiled ‘SME lending master’, a connected programme that teaches its 200-plus branch managers about engaging with SMEs and understanding their needs. ‘Growth banker’, another new offering, is an accelerator academy designed to identify the best young internal talent and fast track their careers.
The ability to build and execute a strategy that balances risk and reward is the biggest challenge facing SME banking in emerging markets
Rashwan Hammady
CIB’s business-banking division also unveiled ‘Women in business’, a programme that supports the needs of women-led SMEs, offering enhanced credit guarantees and tailored financial workshops. Today, female-run firms account for 17.4% of total bank-wide SME assets.
Another new product launched in 2021 gives smaller scale firms access to a bundle of financial services usually available only to larger corporates, drawing together digital banking and payment solutions.
A final tip of the cap must go to CIB’s ‘Professional services programme’, which connects its SME clients with a select group of professional services firms, helping to educate them across a range of non-financial services, from accounting and marketing to legal and human resources.
