Clearly, a symbiotic relationship exists between banks and SMEs. Banks need a strong and, hopefully, expanding pipeline of maturing SMEs to support growth in commercial lending and other financial services. At the same time, SMEs need access to financial services to underpin their entrepreneurial endeavours and fuel their growth ambitions. The nature of the relationship is a critical determinant of success for both parties. The most common banking response to this has been the introduction of SME relationship managers. Broadly, these relationship managers provide several positive features including familiarity with an SME when financial support is required; a mechanism for monitoring ability to repay; cross-selling opportunities; a conduit for complaints and problem resolution; and the offer of general business advice. Essentially, the existence of a relationship manager simply provides the bank with the right to quote for any new business on offer. It also increases their ability to successfully package a suitable solution (although, the prevalence of Kenyan SMEs to ‘multibank’ tends to suggest that relationship banking may not be working in this regard). Evidence of the success (or otherwise) of mobilizing relationship managers from the SME’s perspective is however provided in the fact that they rarely, if ever, name their Bank RM as a trusted source of business advice or a strategic partner in their business development process.
Atterton, T. (2014). Accrediting Small Business Bankers. Nairobi, Kenya: FSD Kenya.