Nedbank is one of the big 5 banks in South Africa (SA) and offers:
- A wide range of banking services to individuals and businesses
- A growing insurance, asset management and wealth management offering.
Nedbank's primary market is SA, however, we are continuing to expand into the rest of Africa:
- Outside South Africa we operate in five countries in Southern African Development Community (SADC), through subsidiaries and banks in Lesotho, Mozambique, Namibia, eSwatini (Swaziland) and Zimbabwe.
- In Central and West Africa we have a strategic alliance with Ecobank Transnational Incorporated (ETI) and we have representative offices in Angola and Kenya.
Nedbank's history traces back to the early 19th century with the establishment of the Cape of Good Hope Bank in 1831.
How would you describe your bank's role in SMEs business journey considering their importance in the economy?
As a financial service provider with over 20% market share in the SME segment, we believe Nedbank has and continues to play a pivotal role in enabling small business growth in SA – both through the banking solutions we provide and the broader support we give to small businesses. This is captured in our CVP as “banking & beyond”.
At the heart of our small business banking value proposition is a personalised, flexible and proactive approach: digital services to support everyday activities and a dedicated banker who caters for the more complex financial needs (learn more)
In 2022, Nedbank supported over 300,000 business clients across their transactional, payment, investment, and financing needs. On the “banking” side our strategy is to provide low cost, feature rich solutions, including:
- Our 6-month no-monthly-fee plus 20 free transactions Startup bundle, our heavily discounted business bundles for medium sized business and tailored pricing for medium to larger businesses
- Payment acceptance solutions with lowest device cost in market (PocketPosTM) and innovative alternatives (Tap on phone) to accept payments without a POS device
- Feature rich digital banking channels, including services such as ability to make overseas transfers with the appropriate South Africa Reserve Bank (SARB) exchange regulation; grant / manage secondary user access; integrate banking data with an accounting partner or set up dashboard views to mange cashflows via free software.
- Access to funding with minimal paperwork (GapAccess merchant cash advance; pre-approved overdrafts; digitally enabled small business loans (under development)). Funding is supported by a dedicated credit team who understands the complexities of small business and is appropriately skilled to analyse the often unformalised financial make up of a small business client
- Tailored solutions for selected industries – including franchise; manufacturing, agriculture. We develop bespoke industry solutions underpinned by understanding industry nuances and pain- points. The proposition incorporates conventional and non-conventional banking solutions. Our aim is to entrench ourselves with our clients through holistic end-to-end solutions that support their business objectives and to facilitate growth opportunities for them.
While a small business can onboard itself and open an account digitally within minutes from the comfort of their home or office, we are also are able to guide and provide ongoing support through >500 dedicated small business bankers in 313 locations across the country, supplemented by an acquisition team of 39 Acquisition Managers who’s role is to hunt for new business.
On the “beyond” side – which we have nurtured for >15 years – the focus is on providing businesses with much needed business and financial education, motivation, access to markets and access to experts.
We achieve this through:
- our own in-house education and networking platform (SimplyBiz‘ with >30k users): www.simplybiz.co.za
- our B2C / B2B ecommerce super shop (Avo Africa) provides an attractive sales platform for customers www.avo.africa
- free access to “The Essentials Guide for Small Business Owners”: Banking and Beyond services | Nedbank
- closer integration of business services and banking (Xero, Sage accounting API; MoneyTracker budgeting tool): nedbank-xero-guide
- smaller direct support (e.g. partnership with weekend markets and payment towards their stall fee);
- strategic partnerships with key industry stakeholders who assist in the identification, placement and mentorship of transformation candidates (BBBEE) thus mitigating risk and reducing failure rates.
Having recently hit 30k subscribers, SimplyBiz has connected in excess of 53 000 entrepreneurs with over 5000 free, relevant tools (marketing, social media, branding, toolkits and guides) to build and maintain sustainable businesses, and led activities focused on practical, tangible ways to demonstrate our commitment to SME’s.
Why do you think your bank deserves to be awarded the SME Bank of the Year?
The small business sector in SA is plagued with uncertain macro conditions and energy constraints, resulting in tough trading conditions, low business confidence and stagnant growth. At the same time, the SME banking market has seen several new entrants. Despite this, Nedbank has shown steady and consistent improvement across all our key client metrics over many years as measured by the KPI annual market survey:
- 10 percentage points improvement in market share (from 14% -> 24%) in 10 years
- Voted market leader in the provision of banking services for last 2 years
- Ranked top in NPS since 2019
We continue to invest in 3 pillars – people, digital capabilities and our SimplyBiz platform:
People / Relationship Bankers
- Skills development training, with increasing emphasis on developing business acumen and how to facilitate credit applications
- Banker measurement enhancements to ensure any/all sales across assisted and digital channels are accrued to the banker’s scorecard, thereby ensuring no channel conflict and more willingness to promote the use of digital channels for new applications and servicing.
- Enhancement of a proof of concept to manage low value businesses via a centralised banker team has proven effective as these businesses would typically get less banker attention due to their lower revenue contribution, but when ringfenced saw the increase in support and many success stories of growth emerge.
- Peer to peer learning via the launch of ‘The Big Green Couch’ where bankers, service managers or even fulfilment staff who receive substantial compliments are invited to be interviewed in the head office environment for all frontline to observe what it means to live the ‘professional relationship banking’ persona.
Digital
Over the last 18-24 months, Nedbank has developed a straight through digital onboarding capability for small business clients (sole props or registered companies). This allows a small business owner to open a bank account from the comfort of their home or office and be operational on online banking or our banking app within 10 min. In the case of businesses with more than one owner, the onboarding of and permissions from the other owners is digitally coordinated.
Money app and Online Banking – includes a business context
Nedbank’s award-winning digital banking channels support both individuals and businesses via a personal and a business context. This means that small business owners can context switch between their profiles using a single set of credentials (Nedbank ID). More complex businesses have the option to use Nedbank’s Business Hub, which offers richer business functionality, mandates capabilities and other services.
The following digital functionality support small and medium business owners via the money app and online banking:
- Transactional account opening of up to three directors;
- Initiation of new lending or acceptance of lending offers (if applicable) withing a digital channel;
- Transacting, with the ability to allow secondary user access (such as an accountant or partner);
- Track finances with the app or online banking via MoneyTracker (free integrated software). Users can monitor their business cashflows via setting up dashboards, classifying income and expenditure, setting budget thresholds and more;
- Make and manage incoming and outgoing global payments;
- Connect to Xero (3rd party accounting provider) via a secure banking feed (API) allowing a daily data feed into the accounting software, so no manual uploads and no delays. Further accounting partners are on track to be added.
Simply Biz (https://www.simplybiz.co.za)
Nedbank has invested significant funds (~R15mil in technology support and ~R6mil in commercialisation spend in 2022 alone) to create is a digital community for business owners to share advice, gain inspiration, and offer mentorship, whilst also providing a platform to promote their company, products, services and opportunities. Having recently hit 30k subscribers, SimplyBiz has connected in excess of 53 000 entrepreneurs with over 5000 free, relevant tools (marketing, social media, branding, toolkits and guides) to build and maintain sustainable businesses, and led activities focused on practical, tangible ways to demonstrate our commitment to SME’s. This includes various sponsorships to enable youth and market exhibitors to get access to markets, and competitions amounting to a total investment of R1.5mil supported 89 small businesses with prizes ranging from equipment to technology to coaching. Our flagship competitions saw 50 entrepreneurs being sent to Henley Business School to get Procurement Ready and 10 entrepreneurs get financially health with Future Capital.
Briefly describe, what are top 3 projects/achievements delivered by your bank in the last 18 months for SME customers?
1. Pre-approved overdraft facilities, with seamless uptake
Using current account information and other internal and 3rd party data points (such as credit bureau information; exposure at other banks; company registration), we have modelled credit risk and credit affordability for existing, banked SME clients, in order to pre-approve an overdraft facility for them. These offers are made available to bankers, who in turn discuss the need, size of facility and lending rates with the client. If the client is interested to take up the offer, it is a simple 5 click process that instantly enables the facility.
Since launching in December, for clients in small business services, we have extended 2485 pre- approved offers, and have seen 23% uptake of the offers being finalised while a further 12% of offers made remain to be finalised. Therefore, total up-take is 35%. Additional offers were made to the larger SME’s.
This contrasts with the traditional credit approach of manually assessing annual financial statements or management account when approached by the client (reactive).
2. Our B2C / B2B ecommerce super shop (AvoAfrica) www.avo.africa
In June 2020, Nedbank launched a business-to-consumer (B2C) super app called Avo. Avo enables businesses to market and sell thousands of products and services to the South African public securely and conveniently. Featuring all the growing digital needs of consumers such as deal-hunting, multi-retailer grocery shopping, take-aways, and home services to mention just a few, Avo is the one-stop-shop for over 2 million South Africans.
January 2022 saw the ~22 000 businesses that sell to consumers enabled as Business-to- business (B2B) buyers on the B2B Marketplace. The B2B Marketplace was developed to enable businesses, both big and small, to connect and trade securely, and to grow the South African economy. Whether your business is looking for additional means to market, sell, and distribute its products, or for better ways to source raw material, stock, or goods for everyday needs, the B2B Marketplace connects business owners with other like-minded businesses, anywhere in South Africa, anytime, regardless of the sector they operate in. Purposely designed with small businesses in mind, our platform enables businesses to sign up and use the Marketplace without paying monthly subscription fees.
Between closed and open loop approaches, Avo B2B has 184 stores and over 800 business buyers, and credit applications of R138m in support of these transactions.
3. Differentiated/alternative funding solutions to support transformation and alternative energy supply
South Africa is committed to driving broad-based transformation.
To cater for previously disadvantaged population groups, Nedbank has successful implemented a differentiated funding solutions in the franchised fuel station sector by partnering with selected franchisors and key fuel industry stakeholders to lower the barriers of entry. Since inception of the differentiated fuel transformation solution in 2019, Nedbank has grown market share to 31%, positioning us as market leaders and the “transformation” bank of choice in the fuel sector.
Furthermore, given the lack of consistent energy supply in South Africa and regular occurrence of ‘load shedding’ with no power-supply for up to 10 hours a day, access to alternative energy sources is critical for the survival of the SME sector. Most businesses have, over the years, put in place back-up generators, however these are expensive to run. Cheaper renewable energy solutions, such as solar and inverters, require higher up-front capital investments.
To address this need, Nedbank has put in place sustainability funding for renewable energy investments,available on extended terms by considering cashflow neutrality position when calculating affordability. For smaller scale solutions, we have partnered with energy specialists who offer specialist advice, access to accredited service providers, technical support and after sales service for our client base, with Nedbank providing the funding for the purchase on similar terms to vehicle and asset finance.
