India is among the top three markets for small and medium enterprise (SME) banking for Standard Chartered and one of the fastest-growing markets in the world, Xie Wen, global head of SME Banking at the London-headquartered bank, has said.
In an interview to Moneycontrol, Wen shared the bank’s strategy for India’s SME space, the plans for inclusive finance, an area of focus for her and more. Edited excerpts of the interview:
How big would Standard Chartered like to become in the next three years on the SME wealth management front?
Our SME Banking segment, which serves small and medium Enterprises in 18 markets across Asia, Africa and Middle East, is a core part of our WRB (wealth and retail banking) strategy. Close to 70 percent of our private banking and international banking clients are business owners. We are well-placed to support their personal wealth needs through our WRB business, especially when they expand their business and wealth coverage internationally.
From a lending and wealth management perspective, the SME segment is a hot potato for Indian bank . How will Standard Chartered be different?
As an international bank with a long history banking the SME segment, we focus on three core value propositions to stay relevant to our client — innovative solutions, inclusive finance and international network. We were the first in the market to offer programme-based lending solutions to SMEs in our key markets.
We continue to work on innovation, exploring partnerships with digital platforms/service providers to enable more accessible and affordable banking services to SMEs and continue to invest in our digital solutions and capabilities and our online banking solution with a full set of corporate treasury functionalities.
Inclusive financing is high on our agenda. Our signature SC Women International Network (SC WIN) programme enables women-led businesses to scale. We have extended $350 million of financing to women-owned businesses across 1,500 clients since the launch in November 2022; 70 percent of $350 million comes from India.
We have a commitment to provide $1 billion of financing to female entrepreneurs by 2028. The international trade platform rooted in Asia/Africa, gives us the edge over others on cross-border banking services.
As businesses scale, owners’ wealth also grows, thereby, requiring wealth management, succession planning and offshore banking services. We are well-placed to support their personal wealth needs, especially when they expand their business and wealth coverage internationally.
What is the plan for growth in SME loans and how big or significant do you expect this book to be for StanC in India and globally?
India is a key contributor to our SME business, a forerunner to our growth aspirations and is an integral part of our Global SME strategy.
India is among top three markets for SME banking at Standard Chartered (besides Hong Kong and Singapore), and one of the fastest growing markets. We offer a full suite of SME propositions here, including transaction and treasury services (deposits, payments, FX etc), small business lending (SBL) and trade and working capital (TWC) solutions.
We were the first in the market to offer programme-based lending solutions to SMEs in our key markets. We continue to work on innovation, strategically investing in digital enablers across the businesses either through in-house technology driven capabilities or through partnerships, leveraging external build to enhance our core SME banking solutions.
SME loans aren’t best known for their zero-delinquency business. How would you handle this issue?
Our portfolio is holding up very well and our continued investment in data and digital capabilities will support this trend.
In India, we have also seen the government taking progressive steps in the form of good credit bureau infrastructure. We also benefit from the goods and services tax (GST) data points, which give us a good directional measure on how the businesses are run.
Where do you see whitespaces in SME lending in India and for StanC in particular?
We see increased demand for credit. As the economy grows, SMEs are expanding their operations, investing in technology upgrades, machinery, and working capital, leading to a natural increase in their demand for credit. MSME exports have shown remarkable growth, highlighting their increasing role in strengthening global trade and creating further need for export financing.
Digital lending platforms is an other area. Banks are increasingly adopting digital platforms and AI-based credit assessment tools, leading to faster approvals, reduced paperwork, and improved operational efficiency. This is crucial for serving a large and diverse SME base.
Collaborations between traditional banks and fintech companies are streamlining loan disbursal through innovative financial products, offering tailored solutions and enhancing customer experience.
What is the rationale behind the focus on green loans?
Climate finance is a huge focus for Standard Chartered and it is also a regular topic of discussion with our clients. Most small businesses are constrained in their resources. However, we are seeing changing attitudes in the positive direction and as their banking partner, we are committed to supporting them in their sustainability journey.
Based on our 2023 Sustainable Banking Report, $3.4 trillion of retail investor capital could be mobilised towards climate investments in Asia, Africa and Middle East by 2030. India is one of the top 3 markets with high investment potential of $543 billion.
The bank has various sustainable solutions such as green deposits, structured products and ESG funds. We are working with internal and external partners to avail these products to our SME clients where possible. Across the bank, we have a holistic sustainable finance proposition across sustainable deposits, green mortgages, sustainable investments and carbon-neutral cards.
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