Frontier Banking in AfricaThe role of SME banking to deliver TBL

Peter Hinton

Enterprise Banking Group

Paris, Nov 2006

Outline

• Introduction

• SME Definition

• SME banking - improving lives

• Development and profit

• TBL challenges in Africa

• Conclusion

IntroductionEBG

• Regional banking group focused on SMEs• IFSC holding company in Botswana• Operating in Kenya & Rwanda TA $110m,

250 staff, 10 branches• Strong management & emerging leaders• Partners with FMO, Kfw, Dfid, USAID,

IFC, Shorebank, Finmark Trust• 10 countries by 2010, TA $1b,listable

SME definition

Employees Turnover

V small 1-5 <$10,000

Small 6-25 $10k-$250k

Medium 26-49 $250k-$1m

SME banking – improving lives

• Lending to SMEs, savings from unbanked• Botswana 15% unbanked• Kenya 5m • Direct impact - women, jobs, rural,

education, savings, health & safety, environment,

• Indirect impact –SR, security• Giving choice, meeting needs

Development and profit

• Healthy tension

• Sustainable TBL = development

• Value driven banks

• BRAC, Bangladesh

• Basix, India

• Fina, Kenya

• Measurement critical

Kenya

Fina Kenya

-1

0

1

2

3

4

5

2004 2005 2006 2007 2008

PAT

PAT

TBL challenges in Africa

• Banks have to see the relevance

• Missing middle

• Missing role models - institutions

• Missing role models – people

• TBL, development and SME banking a good fit

• See the person

Conclusion

SME banking can

• impact lives in the missing middle

• Have a multiplier effect

• can address missing role models

• contribute towards economic growth

Your partner in growth and development