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Asian SMEs Pick Local Banks
The latest results from the Kadence Business Omnibus (KadBUS) survey of financial decision-makers in Asia Pacific indicates that small and medium sized businesses prefer local banks. It also suggests that they choose banks based on their specialist products and knowledge, not just the amount of credit they offer.
KadBUS surveyed 300 SMEs in each of Malaysia, Singapore and Thailand. In Singapore and Thailand, 74% of those who thought SME banking services had improved put these improvements down to a wider range of services and products specifically aimed at SMEs. 63% of respondents in Singapore say they have seen improvements in the knowledge of bank staff, but this drops to just 33% in Malaysia and 9% in Thailand. Respondents in these two countries were more likely to cite an extensive branch network as a reason for overall improvements.
SMEs still tend to warm to the local banks. The banks considered 'most improved' in the last two years were OCBC in Singapore, Maybank in Malaysia, and Bangkok Bank in Thailand. However Citibank has made progress in Malaysia, where some of its ratings are on a par with local banks.
Piers Lee, Asia Pacific Director of Kadence, says product and service considerations have become more important drivers of choice than the amount of credit on offer. He states that 'bank lending can be an expensive way of financing business, and SMEs are probably looking at alternatives such as personal assets, venture capital, and foreign partners'.
Kadence is a business-to-business research agency with offices in London, Boston, Singapore and Sydney. The company is online at www.kadence.com.
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