Thinking behind Standard Bank’s recently established Business & Commercial Client division
The configuration of Standard Bank’s recently established Business & Commercial Clients (BCC) division heralds the formation of a practice dedicated to leveraging the power of small, medium and larger businesses to sustain and expand inclusive domestic business growth across Africa.
Successful emerging market growth stories are characterised by the proliferation and expansion of small and medium businesses. And even in developed economies, the SMME sector defines and sustains the kind of economic expansion and broad-based employment on which long term prosperity and stability is built.
Standard Bank’s commitment to driving Africa’s growth has contributed to the evolution of a highly developed African business support capability. The creation of a dedicated, purpose-led business and commercial client practice seeks to refine and focus Standard Bank’s highly developed African business building abilities – at a time at which local business formation across the continent is leading and sustaining the next phase of African growth.
Sitting in South Africa with its own small and medium business development challenges, Africa doesn’t always look like a natural home for successful business incubation. Looking further afield to East and West Africa, and more even broadly within our region, to Botswana, Namibia, Zambia and Mozambique, however, a very different picture emerges.
This continental view and ability is what Standard Bank’s seasoned Africa-wide BCC team are harnessing to support business growth.
Physically on the ground with experienced and capable workforces recruited and grown in-country, Standard Bank’s BCC division supports full-service business banking operations in 15 African economies. This developed banking platform is directly supporting the emergence of domestic and regional businesses across the continent.
The fact that Standard Bank has, for a long time, also been present in the development of the broader policy, legislative and infrastructure environments that give rise to independent business formation in Africa’s emerging and frontier economies means BCC is ideally placed to lead the next wave of business formation on the continent.
Whether clients are businesses evolving to support structured resource and infrastructure plays, or sole traders being equipped with the capital, networks and capabilities to become SMMEs or medium-sized enterprises, BCC has a clear view of how African businesses can grow, what is required to achieve this growth and what this growth will achieve for Africa.
Growing small businesses into family enterprises or larger importer/exporter or wholesale distributor propositions, or eventually even into regional private and listed corporates, will sustain inclusive, privately-owned economic growth in Africa for generations to come. This will increase employment and broaden economic inclusion, creating the conditions for general prosperity and long term social and political stability.
Critical to fostering this growth are the basic financial building blocks of independent capital formation – especially control of one’s own currency.
The ability to manage – and therefore predict – the price of goods and services is essential for business formation. In Africa, micro, small and even medium sized businesses are routinely challenged by currency fluctuation. In these environments Standard Bank’s presence, local balance sheets and access to finance is a critical for, especially, smaller businesses to insulate themselves from the cost and pricing volatility that often prevents their growth into larger and more stable operations.
More broadly, as African businesses grow regionally and globally and foreign businesses and investors look to Africa, Standard Bank’s reliable, present and capable counter-party banking structure on the continent will become increasingly important for Africa’s emerging business segment. Standard Bank’s now well-functioning working relationship with equity partner ICBC, unites Africa and the world’s largest banks in a trade and finance capability ecosystem that, effectively, spans the globe. This is, daily, building the bridges, relationships and systems linking African businesses to the world – along with a world of capital, investment and know-how to Africa.
Despite the very real challenges that the continent continues to face, the learning of the recent past for Standard Bank is one of profound resilience and huge progress in Africa. Even in often difficult circumstances, the fact of Africa’s astounding rise – and growth – is real.
Standard Bank, however, is not alone in recognising the potential of the Africa’s emerging businesses.
Africa is home to many excellent domestic banks as well as world-class regional banks. In addition, Standard Bank faces, daily, intense competition from local fintech’s and teleco ventures in every area – from simple payments to complex cross border transactions. There is equally intense competition in the provision of credit and risk management. At the same time, most of the big global fintechs, like Apple Pay and Paypal, are also active on the continent.
Faced with this competition, Standard Bank points to its hard-built physical presence, feet and infrastructure on the ground, local balance sheet and formidable digital capability spanning the continent. This established African ecosystem means that BCC has the right people, thought processes and relationships in place to support small and emerging regional businesses successfully navigate challenges and leverage the huge potential that the continent presents.
In realising this potential, the role of technology cannot be overemphasised.
For small and less well-capitalised businesses in particular, the sustained decrease in the cost of banking afforded by technology is a game changer. Technology, today, is the difference between survival and failure for businesses. Even simple things, like no longer having to go the bank on Saturdays to collect cash to pay staff has transformed many businesses. As technology increasingly frees up time and resources while reducing headcount and salary bills, otherwise marginal businesses are becoming increasingly viable – especially in the critical first few years of startup and growth.
Standard Bank’s BCC division is resolutely committed to expanding the suit of both simple and complex technologies that are making ever more businesses possible in Africa.
BCC has been assembled on the view that Africa is entering an exciting expansion phase, characterised by rapid private business formation and growth. As such, BCC will harness and focus Standard Bank’s considerable business experience in tandem with its established African and global capital, knowledge and capability ecosystems to nurture and grow African businesses domestically, regionally and globally.
Bill Blackie is Chief Executive of Standard Bank’s Business & Commercial Clients division.