Banks Embracing Automation for Accelerating SME Lending Processes

By CIOReview | Monday, July 29, 2019

Building an online platform with self-service capabilities such as streamlined internet implementation, document imaging, online creditworthiness evaluation, and digital document exchange throughout the lending cycle will make the method of credit disbursement much simpler and faster.  

FERMONT, CA: According to a World Bank report, micro, tiny and medium-sized companies account for more than 80 percent of the total industrial businesses, employ approximately 117 million individuals and contribute more than 40 percent to production and exports. The statistics highlight the importance of offering MSMEs with inclusive economic growth. Small businesses form a significant segment of customers that banks can not afford to lose to alternative lenders to SMEs. Banks now need the hour to restructure the SME lending business.

Choosing the path to embrace digitalization by introducing an internet credit request, automating the credit approval process, and creating an internet platform will assist banks to speed up the lending process for SMEs. Besides, they should begin providing personalized advice to small companies on banking products and services and help them solve multiple company problems. They are maintaining current relationships with prospective SME clients needs that banks segment small business based on the number of clients, types, and profiles of companies, products, and credit history. Investing equal effort and time to asses all sections of SMEs could raise the red flag for banks to reach a final decision on lending.

The loan application evaluation and review mechanism should be automated, saving credit analysts time, loan process costs, and streamlining the decision-making process. In the fast-paced digital globe, the integration of automated underwriting systems will allow banks to achieve a competitive edge.

Banks should extend their assistance to early-stage SMEs through the provision of value-added services, mentoring, instruction, and support scheme. Small companies involve business management instruments and guidance on how to spend working capital diligently, rather than just financing.

Maintaining a leadership position and being a game-changer demands that legacy practices be unlearned and that the SME lending business be restructured. Small companies move banks very quickly to quick and tailored services in the globe of digital and alternative lending that can sustain their development at every point.