SME Banking Strategy

What really matters to small businesses seeking funding? Our 2021 SME credit survey addressed this question to almost 1,000 small businesses, asking them to share their experiences and preferences in accessing credit. Our survey sample was evenly distributed across China, Malaysia, Indonesia and Australia, in order to capture variance in quite different economies. Despite the many obvious differences between the markets, respondents’ needs in SME lending were strikingly common.

SME Banking Services

• Major banks remain the dominant provider of SME lending, with regional banks in second place.
• Across all markets, speed and flexibility of repayment terms are a must-have need in SME banking.
• Australia and Indonesia value an end-to-end digital experience, while Malaysia and China value the certainty that comes with pre-approved lending limits.
• The lion’s share of funding in SME lending across markets remains equity and traditional debt products, including property-based finance.
• In most markets, businesses view the requirement of a personal guarantee as one of the biggest pain points of the credit experience.

SME Banking Ecosystem

This research confirms the importance of speed, flexibility, and a digital experience in SME lending. While respondents across Australia, Malaysia, Indonesia and China strongly prefer features typically associated with fintech and alternate lenders, incumbent banks retain their dominant position as the go-to provider. However with the importance of existing relationships ranked last in three of the countries surveyed, the window for banks to respond is closing.