Standard Bank’s recently established Business & Commercial Clients (BCC) division is deliberately focused on building a capability ecosystem to support small traders, agribusinesses, emerging manufacturers and entrepreneurs to grow into formal enterprises – or even become national corporates or cross-border multinationals.
In line with the Group’s purpose of driving Africa’s growth, the emergence, proliferation and expansion of small and medium businesses hold the key to the kind of sustained economic expansion and broad-based employment on which long-term prosperity, stability and security is built.
Small Businesses in West Africa
In West Africa, where Standard Bank’s BCC division is currently focused on Nigeria and Ghana, small businesses account for 40 – 50% of GDP and, in some markets, up to 80% of employment. As such, even moderate growth in this sector has the potential to catapult economies onto multifactor growth trajectories.
In specialist sectors like agriculture, public services, manufacturing, and oil and gas, where Standard Bank has advanced expertise, government policy and market conditions in West Africa are coalescing to present significant new opportunities for small business formation and growth.
In agriculture, for example, both Nigeria and Ghana currently provide central bank supported risk-sharing and capital provision schemes to small farmers and agri-processors. The aim is to reduce import bills, increase food security and earn foreign exchange through the risk-managed provision of capital to small agri-businesses. For similar reasons, Angola is incentivising manufacturing. This is providing an opportunity for investment in small and medium plant, production and distribution businesses across the Angolan product and value chain. Oil and gas opportunities in Nigeria, Ghana and Angola remain large. Similarly, the public sector, still the largest spender in all four of these West African economies, continues to offer small businesses broad opportunities, especially in health and technology in the wake of Covid-19.
To leverage these opportunities and then grow, businesses need more than just capital. They need to be understood, correctly advised and then supported to execute in a nimble, digitised, way.
Small Businesses in West Africa – Business & Commercial Clients Division of Standard Bank
To this end, more than products, BCC is building a business support ecosystem in West Africa that allows easy, digital onboarding and instant access to capital based on relationships, rather than just collateral. Thereafter, simple and easily accessed digital and cash payment and collection solutions are required. At the same time, every small business needs direct access, usually by phone or virtually, to experienced relationship managers. At BCC, these seasoned business builders share the critical insights, thought leadership and practical advice needed to develop and grow client businesses. Standard Bank advisors also introduce small businesses to the right supplier or off-taker networks, locally, cross-border and even globally. Thereafter, solutions like Trade Suite and Trade Club assist with door-to-door import and export, including customs, logistics and foreign exchange. As businesses grow, they are supported with broader knowledge networks, including introductions to SME associations or local, regional and global industry or trade forums.
Standard Bank’s Africa-China Import Solution, for example, grew out of the challenges that African importers experienced sourcing, importing, and shipping quality goods from China, affordably. By partnering with a highly regarded sourcing agency in China, Standard Bank developed a service that allows African traders to select goods, suppliers and partners in China, directly through Standard Bank. Then, working through the sourcing agency on the ground in China, Standard Bank ensures that all client goods are priced and quality controlled before dispatch. The Africa-China Import Solution goes on to facilitate the end-to-end importing process, from letters of credit to customs to logistics and payment. The entire process is conducted remotely without customers ever having to travel to China, or even go into their branch at home.
On the export side, every year Standard Bank takes African nuts, wine, seed, chilli, edible oil and other agri-producers to the Chinese International Import Expo (CIIE). Attendance pretty much guarantees supply contracts as the full range of Chinese off-takers are present each year. Standard Bank also takes business customers to the annual Africa-China Trade Expo, achieving similarly successful results in terms of supplier-off-taker contracts negotiated on the behalf of African exporters. Finally, Standard Bank hosts quarterly virtual trade match-making events focusing on specific sectors. At these events, African producers or exporters get introduced to dozens of potential off-takers virtually, often concluding deals on the spot.
Small Businesses in West Africa – Standard Bank’s Clients
Standard Bank currently works with 101 000 small, medium and larger enterprises across West Africa. Without adding any more clients, if each small trader in this segment is supported to become a medium enterprise, each medium enterprise grown into a national corporate, and each national corporate expanded into a trans-regional entity, BCC’s market share will increase exponentially.
Helping small business clients correctly track and gather financial information, secure loans, meet bank-approved dealers or suppliers in South Africa or China, negotiate forex quotas or letters of credit, complete cross-border paperwork, or finance vehicles, all under the guidance of seasoned business building professionals, can catapult a survivalist operation onto a multifactor growth track.
The aim over the next decade is for Standard Bank to point to a stable of new transregional businesses operating across and out of West Africa that has been birthed as small local businesses and successfully supported up the enterprise development ladder by BCC.
The socioeconomic impact of this kind of ecosystem impact will multiply as West Africa’s small and medium businesses become bigger and more diverse, defining and sustaining inclusive economic growth, broad-based employment and long-term prosperity.
This is how Standard Bank drives Africa’s growth – one small business at a time.
Tunde Macaulay is West Africa Head of Standard Bank’s Business & Commercial Banking division