Micro-, small and medium-sized enterprises in emerging markets McKinsey on Society

It is not just banks in emerging markets that should grab this opportunity. Western banks will find innovative practices that they can use to refresh and adapt their traditional banking models back home.

March 2012 | By Mutsa Chironga, Jacob Dahl, Tony Goland, Gary Pinshaw, and Marnus Sonnekus

This paper argues that the time is right for banks to step up their efforts to serve micro-, small and medium-sized enterprises (MSMEs) in emerging markets. There are three reasons for our optimism. First, an estimated 60 percent of global banking revenue growth over the next decade will lie in emerging markets. Second, more and more banks in emerging markets are finding ways to overcome the difficulties of serving the important MSME segment. Third, innovations in technology, risk assessment and business models are increasingly facilitating their effort.

It is not just banks in emerging markets that should grab the opportunity. Western banks will find innovative practices that they can use to refresh and adapt their traditional banking models back home.

Comments

http://twitter.com/drfameg Dr. Fatih Mehmet Gul

@drfameg: Thanks @McKinseySociety for the great report! MSME funding means job creation and many benefits for banks! http://t.co/R5w4Q2Cj #CSR
Laura Shemeza Gahungu

Microenterprises in emerging markets are lacking the startup resources: essentially financial and capacities to follow trends (marketing & technical skills). As a business solution, Banks might design a customer tailor product/service that fit the demand of these MSME’s (like short-term loan) and combines it with the needed training or have partners’ to do so. African youth are full of potentials if given the right opportunities: Building on existing experience is key!!!