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Panel discussion: SME Banking is a growth opportunity

The top challenge for SME is to gain financial credit in the Asia Pacific. Market demand for financing is > US$ 5 trillion with 50% of it being unmet. Having said that, we asked our industry experts to give their opinion on four key questions about SME banking – a growth opportunity in the Asia Pacific:

1. Looking at addressing the SME banking opportunity, would you invest your money in any of the start-up banks?

  1. Shelly: Absolutely. It is a huge opportunity. We always forget about the size of the pie. It’s more than a five trillion-dollar opportunity.
  2. Kunal: I think irrespective of the times that we’re in right now, the market opportunity is still there. If you think about the untapped market, around 33% of businesses don’t have access to a lot of financial services or inclusion. It’s a big issue and I think it’s one that’s worth pursuing.

2. When it comes to serving the SME needs, will the global tech giants be the ultimate winners or will the banks be leading the way? (tech giants, telecom, and banks)

  1. Shelly: If I talk about who will be the winner, I think I see it as a collaborating approach, where every one of them is sitting on enormous data. So, looking at the insights from databases, they say we are looking at SME challenges and the products, while telecom operators can provide that the infrastructure for the front runners with awareness and digital adoption. I think all of them must go hand in hand. I don’t see a clear winner there. But yes, the banking and NBFC must collaborate to reach for those levels.
  2. Kunal: I think that each of those three men can partner when in fact they’re all trying to make some inroads into the SME lending space in particular. I think from an economic point of view, they must have a collaborative approach. Most SMEs wouldn’t ordinarily just go to a telecom operator for a loan or any kind of financing. So, I think that there must be some collaboration to tie up with the fintech company that specializes in that domain and for them to get growth potentially. And Shelly’s point around data is important.

3. Will we at least address 50% of the unmet opportunity in the next 5-10 years?

  1. Shelly: While attending the amount of diversification that this opportunity has on the sector side, on the industry side, the people have different requirements in terms of securing it also for lending. We are just evolving in terms of our infrastructure, and lending is directly connected to it. So, in five years we will be able to address at least 50 to 60 percent of the problem. With the latest learning we have from Covid-19, digital adoption has reached new heights. So, we are building the foundation and the lessons we learned in the primary on the post environment recovery will, you know, bring out some new learnings.
  2. Kunal: Covid-19 would have had some impact on our cities globally, certainly, but also similar in the Asia Pacific region. So, the demand might have tailed off a little bit because some of these businesses may not be transacting in that sense. Nonetheless, I still think that demand will still be there, and it will be a slow start. I think it will be slow even once the economies across the globe start to recover from being locked down for a period. That’s not something you can get over very quickly. So, there will be a period of downtime. And nonetheless, they will realise that demand will still be there, it might not be around 60 percent now, but incremental. Hopefully, in due course as more people look to start their businesses again and look to start over completely, it will increase. So, let’s see if we have a deep dive.

4. What are the pressing challenges for SMEs to access financial credit?

  1. Identity crisis: The information about SMEs is either inaccurate or they do not have enough information to trust SME owners.
  2. Digital crisis: The lack of awareness and literacy in terms of digital adoption and the high cost of adoption.
  3. Information crisis: Credit scoring for SMEs is a challenging task, banks do not have digital avenues to access information about SMEs and use only their financial statements.


The fintech companies are robust in the digitalization journey and are penetrating the market more efficiently, compared to what we see the banks doing. Having said that, a collaborative approach between fintech, banks, telecom, and technology giants will pave a successful strategy to serve the SMEs. The next five to 10 years will create a beautiful roadmap for the SMEs and make the job a little easier to gain access to financial credit.


Twimbit facilitated a conversation with two industry leaders, Shelly Arora and Kunal Patel. We discussed how SMEs are financially constrained and banks can turn this into a growth opportunity in today’s scenario. Each participant’s view is expressed in their personal capacity and does not necessarily reflect the views of their respective organizations. We thank our panelists for their contribution.