Banks’ Non-financial services

While it is important to build the capacity of financial institutions (i.e. banks, microfinance institutions, financing companies, etc.) to promote Micro/SME Banking business , many studies show that the greater constraint comes from the lack of qualified borrowers (customers),  i.e.  appropriate demand.

 One of the key constraints to increasing access to finance is the lack of business skills to adequately demonstrate management and financial capabilities to potential lenders (as well as investors), and mostly forced MSMEs to source their funding through locally known and traditional money lenders. 

Therefore, to ensure that there are an adequate number of investment-worthy borrowers there is need to significantly scale up training on entrepreneurship and business management. There is a growing interest among financial institutions to serve their MSME customers with not only financial products but also non-financial tools and services. Non-financial services have the potential to help MSMEs not only to become more bankable but also to increase their ability to repay loans, and improve their business practices to grow their businesses.  Such services can also help financial institutions increase MSME customers’ loyalty and acquire new business customers.


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