Dear Bank. My name is SME. In full this means Small to Medium Enterprise. You may have heard of me. I was born five years ago. Right now, I am an annoyed and frustrated SME. The reason. This whole interest rate argument and from my point of view tantrums that being thrown from the financial institutions right, left and centre, simply does not make sense. I do not claim to be an expert on economic affairs or even claim to be defending positions on interest rates. The workings behind the scene are beyond me. This anger is more than just what is happening right now and current discussions are simply opening up old wounds. From time immemorial my fellow namesakes and I, have been denied by you and your colleagues (the banks) the credit that is needed to grow our businesses. Yet that credit (via deposits) comes from citizens of these country who would benefit from our collective economic potential. Funny things is that if they gave more of us SME’s access to funds, the economy would do better, people would have more money in their pockets and hence more money in deposits. We SME’s do not understand what can possibly be so complicated about that. Whether the interest rates are 21% p.a or 14% p.a, your policy/belief about us has not changed.
You think me and my friends are risky. Let us tell you about risk. We collectively employ most people in this country. Because of that most people can feed families and take their kids to school. We watch you retrench as easily as changing toilet paper whilst we in the same economic spaces and much less resources, do our best to keep people in jobs. Maybe there would be less retrenchment if those minds you lost were put to work to find innovative solutions. Because of the collective role we play we also provide the consumers of goods and services. Yet it baffles me that we are considered that risky. I know you use these ad hoc statistics that claim that seventy, eighty or ninety percent (depending on which ‘authority’ you choose to look at) fail and that is used to justify considering us risky. But did you take time out of your busy risk free schedule to understand how many failed because they lacked that access to credit. That first simple overdraft. Or how many did not actually fail but transitioned into something else. This is the journey and cycle you need to understand. One of the biggest financial risks for this country lies in the fact that you don’t want to take risks (Click to Tweet this thought).
I’ve seen a few of you trying but there’s still work to do. You know our parents (the bigger companies you all break your backs chasing) all started like us. SME’s. All businesses were start ups. Have you decided you want to play no part in our journey to become parents and bear other children? However, should we make it on our own, you will all want to jump onto the bandwagon and bank us. My older siblings told me this happens. My parents told me to never be a big fish in a small pond. I think most of you keep chasing the small pond of “suitable clients” and ignore the rapidly and underserviced growing pond. Innovation and creative thinking is not a choice for me. My parents told me that I have to be a visionary, think big, and looked beyond current resources every day and this is what I have done. Without your help I have grown from my bedroom to an office space.
From one intern to 8 full time employees and another 10 part time. From one client to hundreds every year. And thousands like me exist. I am still considered risky and you want property as security before you can lend to me. Didn’t you notice I was too busy building a business to buy property? Can’t you see my value has and will continue to appreciate faster than any property every will? Property is finite. Last I checked, more land is not being made but the number of ways my business can scale up is immeasurable. I almost understand you stepping back when I had just been born and admittedly I was a bit confused but five years later! What does an SME have to do to prove him or herself? I create vision and strategy for my business in my bedroom, a small meeting room, and occasionally lunch out with my team. You go to nice fancy resorts for strategy. Yet all that, has still not changed how you can access people like me and partner with me without a piece of land involved? In this time my own employees have accessed credit. You see they have pay slips so you lent them money for cars, phones, holidays, school fees etc. You helped them consume more on credit and it was unsecured. But you would not fund the business itself for growth. Who do you think churns the wheels for those salaries to be paid and hence your interest income to come in?
As an SME I have learnt that no problem comes without opportunity. If I had one hundredth of your resources I promise you, I would change the world. This whole conversation you are having is fine and as I said before maybe there are economic and financial policy issues that are unclear to those of us who speak in the layman’s language. However, this I know. Bank, you have ignored the productive sectors of the economy. My namesakes and I. You have even chosen to direct credit to consumption which has very short term if any economic value, instead of directing it to those that have long term value not just to you and your shareholder but to the economy. I do not think an opportunity can exist forever. A need cannot exist indefinitely without someone somewhere seeing the gap and creating the solution. I pray that you or somebody else grabs this opportunity and it will be grabbed. Because people like me, people you need to look for, will do anything to make our vision come to pass. Have you measured that conviction in your risk profiling? Inaction on your part can delay it but it will not stop it. Get me now. Don’t look for me when I’m a parent.
Waceke runs programs on raising capital for entrepreneurs at Centonomy. For more details email her on firstname.lastname@example.org | Facebook/Waceke Nduati| Twitter@cekenduati