Absa Bank Kenya breaks tradition and goes out looking to help grow SMEs

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The world is ever-changing and, so is the sector your business operates in. You don’t just need data to keep track of trends that are shaping the economy – you need the expertise to turn that data into valuable insights and sustainable growth opportunities that will unlock your business’ potential.

In the Absa Insights podcast series, The Money Show’s Bruce Whitfield engages in conversation with the bank’s sector experts about investment possibilities in Agriculture, Consumer Goods and Services, Enterprise Supply Development and Telecommunications, Public Sector and, Natural Resources and Energy.

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Business Banking Director of Absa Bank Kenya Elizabeth Wasunna-Ochwa believes Africa is still an open playing field and there is plenty of room to include SMEs.

She is passionate about affording those who are traditionally at the bottom end of society with opportunities, mentoring, and training to enter the small and medium-sized enterprises space.

In Kenya, the wealth divide, as in many countries, is very unequal but Wasunna-Ochwa sees an opportunity to reduce the gap.

Wasunna-Ochwa says the Enterprise Supply Chain Development (ESCD) is one of the key mechanisms used to make this happen.

If you are able to empower the bottom-end, how much more would we be able to get. Being on the bottom end does not mean they are not hardworking. They just have not had the opportunities or been invested in, especially where financing is required.

Elizabeth Wasunna-Ochwa, Business Banking Director – Absa Bank Kenya

Wasunna-Ochwa says this is where a programme like ESCD comes into play.

We enable the lower end to be able to start seeing the opportunities and then grow in a structured and solid way to better be able to contribute to the economy.

Elizabeth Wasunna-Ochwa, Business Banking Director – Absa Bank Kenya

She believes strongly that the constraints on people from lower economic classes are those of opportunity and access – and not a lack of aptitude.

To confirm this, we have spent a lot of time over the past five years as a bank, trying to see how we can uplift the SMEs.

Elizabeth Wasunna-Ochwa, Business Banking Director – Absa Bank Kenya

It is not always financing that they are looking for, but the opportunities in the market. They are looking for networking opportunities for them to take advantage of what they already have. Finance usually comes third or fourth place down the line.

Elizabeth Wasunna-Ochwa, Business Banking Director – Absa Bank Kenya

Given the right opportunities, correct support, and mentoring, those in this space would thrive, she says.

The arrival of Covid-19 has not helped the intensity of challenges, she adds, and therefore coaching and mentoring at the start of an SME’s journey is essential.

New SME businesses often do not survive beyond their first year

You have to have a few things in place in order to sustain a business beyond the first year.

Elizabeth Wasunna-Ochwa, Business Banking Director – Absa Bank Kenya

One of the issues she says she always includes in coaching and mentoring new businesses is the importance of your name. Typically, people start a business and name it after themselves.

Surely you can’t allow it to collapse in the first year, because what are you saying to future generations, your children, and your children’s children? You would want to hand it over.

Elizabeth Wasunna-Ochwa, Business Banking Director – Absa Bank Kenya

This has triggered useful conversations and learnings on how to make a business more sustainable and the challenges to that, she explains.

This has led to people doing their homework as well as being passionate about it.

Elizabeth Wasunna-Ochwa, Business Banking Director – Absa Bank Kenya

Enterprise Supply Chain Development (ESCD) arose from Absa Bank Kenya flagging that many big corporate use well-established traditional business partners in their supply chain.

It is the bank’s effort to support the new small businesses by having these large corporations include SMEs in their supply chain.

We say please, train them, support them, sub-contract them, handhold them, because therein lies an opportunity for us as a bank to support them because we know the anchor contract belongs to you and you will support them accordingly.

Elizabeth Wasunna-Ochwa, Business Banking Director – Absa Bank Kenya

This anchor contract enables these small businesses to learn and grow and secure contracts elsewhere she adds.

She strongly believes small businesses learning from large traditional players is a method that works and does not pose a threat to the big corporates.

Having a more diversified array of companies including stable SMEs helps grow the economy, she adds.

It actually gives the corporates a chance to expand to other regions.

Elizabeth Wasunna-Ochwa, Business Banking Director – Absa Bank Kenya

The African continent is still an open playing field

Wasunna-Ochwa agrees this more proactive approach of going out and finding potential new SMEs to support is very different from the old-school traditional banking of the past.

It is very different. In the past banks would wait for clients to come to them and even dictate how they dressed when they came to the bank, in today’s environment there is far more competition for financing.

Elizabeth Wasunna-Ochwa, Business Banking Director – Absa Bank Kenya

The thing that is really different today is that we are not expecting that the client always has the information. We go and provide them with the information so that they can be more bankable, and that means we have to step out from our traditional role of sitting in our offices and find partners who have access to SMEs.

Elizabeth Wasunna-Ochwa, Business Banking Director – Absa Bank Kenya

For data-driven insights that match foresight with sustainable possibilities, re-visit our Absa Insights page regularly to listen to thought-provoking conversations with Absa Corporate and Investment Banking sector experts in the Absa Insights podcast series.