CAIRO: “The future is SMEs – not only for the country but for the banks, said Akram Tinawi, commercial banking director for Barclays Egypt.
The frantic rush to compete over the top 10 percent of clients has left a sea of higher risk, higher market-share bankable businesses waiting for the right bank to come along, said Tinawi. As competitors struggle for a “smaller piece of the pie, which is the last corporate, the future of the sector is in small and medium enterprises (SMEs), he said.
With its year-old commitment to SMEs, Barclays has quickly emerged as a market leader in this budding trend.
Though Tinawi has only recently ramped up Barclays’ involvement in the SME sector, his roots in banking are deep.
While studying at the American University in Cairo in 1988, field research landed him in the Egyptian American Bank, and its managing director offered him a job immediately after graduation.
Tinawi argued that job placement is key for the success of individual careers and for a company to capitalize fully on its workforce. Tinawi, himself, initially wanted to go into risk management but was persuaded to pursue marketing by his first boss.
Before coming to Barclays, Tinawi ran, among other things, the financial institutions department at Citibank, where he worked for 10 years. He arrived at Barclays in April 2004.
Tinawi argued that the needs of companies in Egypt have evolved over the last 20 years, and today need more comprehensive involvement from the banks with which they do business.
While some of the companies present when he started his career in corporate 20 years ago are still around, their needs have changed. “The way they look at their industry has developed, he said.
In turn, the role of banking has changed. “We have a holistic approach for corporates in Egypt, he added.
The future of banking lies not simply in loans but in an approach through which the bank offers its clients an array of products to help it succeed. “For a company to survive and to develop, he said, “it needs to have a different approach to its business. That’s when banks should act as partner.
His approach to banking stems from a commitment to building business ties with SMEs.
Although they represent almost 90 percent of the country’s GDP, SMEs are untapped resources in the banking world because of fear they represent a higher level of risk, Tinawi added.
Barclays started banking with SMEs in June 2007 and now has over 3,000 customers.
Tinawi is adamant that Barclays, when dealing with SMEs, should play an advisory and training role to ensure the client company thrives and to minimize risk incurred by the bank.
In the coming months, his firm plans to launch the Latitude Club in Egypt, which will include membership for founders of SMEs. Through the club, Barclays’ clients will have access to additional office space, vast stores of research and new lines of trade.
Tinawi also said that the Latitude Club represents a renewed commitment by Barclays to give its SME clients access to some of the big corporate names on its client list.
“When you bring together all the players in an industry, from the big ones to the SMEs, imagine the amount of knowledge, experience and information, they can get about an industry, Tinawi said.
Risk may be the major reason that many banks have shied from SMEs, but Tinawi blasts that notion, arguing that a smart bank can navigate the waters, noting that Barclays will lose less than 0.5 percent of its investments in small businesses.
Whether it’s managing the strengths and weaknesses of employees or evaluating the needs and concerns of SMEs, Tinawi seems prepared to continue reaping the rewards of a patient and calculated approach to banking.
To read the other stories in our monthly special focus on Egypt s banking sector, click here:
http://www.thedailynewsegypt.com/article.aspx?ArticleID=16041
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