An interview with Sergey Kovalenko, Deputy Chairman of the Board of the ATF Bank.
ATF Bank is one of the top-10 largest banks in Kazakhstan. In 2017, the total volume of issued SME loans grew by 116%, compared to the previous year. The number of loans on state programs also increased by 53%, and today, they represent onefifth of the total loan portfolio. In general, following the results of 2017, the market share of the ATFBank in the SME segment tripled in growth. What made it possible to achieve such results? And what are the forecasts for the coming year? The following is an interview with the Deputy Chairman of the Board, and Board Member at ATF Bank, Sergey Kovalenko:
Please tell us, what is the reason for your success?
We predicted the active development of SMEs three years ago, and we made every effort to make this the key direction in our business structure. The first thing we did was to divide the business into several segments, namely, small, medium and large. For each of them, we created a matrix of needs. We looked at which of our products we needed to close, and which not, and we created new products.
In 2017, the SME loan portfolio growth reached more than 60%, and we doubled the number of loan applications during that year. The average loan amount is 50 million tenge. To achieve our goals, we needed to increase the client base. For us, it turns out that we grow at the expense of essentially a greater number of clients. This is our main success.
What are the goals you set for yourself in the SME segment?
Our main task in the SME segment is revenue growth, which is mainly due to the increase in the number of clients; they are not just customers, but satisfied customers. Today, the bank is a service company, which is chosen according to recommendations, and in the first place, there are two important factors: the number of departed / arrived customers and the willingness of current customers to recommend the bank to others. How the bank treats its customers is controlled through the NPS.
What is your competitive advantage?
We, as a bank, can compete with advertising budgets, but we do not want to do this because this is not always effective, especially when advertising is too much. Our main advantage lies in experience and competence. Another important point is the speed of decision making; we were convinced of this by conducting research among entrepreneurs. Among the factors influencing the decision to choose a bank, customers noted the attitude of the bank’s specialists, along with the quality and speed of service. The price was only in third place. At the moment, due to optimization of internal business processes, we have significantly reduced the time for making decisions on lending.
The term for considering applications for loans or changing the terms of lending has been reduced from 46 days (as it was in 2016) to 14 days (as it is now). That is, for 2 weeks, the client can receive the final approval on his/her application. In addition, we have implemented a remote pre-approval process for loan applications. Do not come to us: call, tell us, by mail, post the documents—we will give an answer in advance. If the client is larger or we do not understand everything, then the employees who participate in the decision making by the visiting committees get on the plane or on the car, go to the client, watch his business, study the documents, and a preliminary decision can be announced right away.
How much is demand on SME lending in Kazakhstan now?
Today, the financial gap is quite high, and the demand on lending is constantly growing. At the same time, for example, small businesses often need small loans. Based on this business need, we have a special loan product, so-called quick loans. The client only needs to provide brief information about the company, which often occurs at the first meeting. Based on the received data, the bank takes a preliminary decision on financing the project within 2-3 days. In support of the argument that we have correctly responded to the need are the dynamics of this product. We launched it relatively recently, in October 2016, and now, its share of the total number of loans disbursed is more than 25%.
Following the results of 2017, ATFBank became the market leader in terms of the growth rate of SME lending
What relationship management model is used in your bank?
Our credo is to become the best bank for our clients. This implies not only lending and operational services, but also the creation of value in terms of consulting, conditions for the development of business ties, and so on. We have long ago moved away from the concept of “Bank-Client” and today we build relationships with customers as partners. That is, apart from purely banking services, we are now creating an entirely new platform for interaction with businesses. It has several components: informational support of clients in the form of sectoral analytical reviews and special events for entrepreneurs and businessmen, which we carry out throughout Kazakhstan.
For example, last year, a series of meetings took place in the format of a workshop, at which the possibilities of financing were discussed within the framework of state programs that support businesses. We also held a big business forum, which was fundamentally different to the classical forum. We gave our clients the opportunity to get to know each other, to learn about the successful projects of others, and to see more clearly how to use the tools of cooperation with the Bank. This year, a series of similar forums will be held in the various regions of Kazakhstan. We are planning to print a specialized publication, with very useful and practical content.
What are your expectations for the further development of the SME banking segment?
The SME segment in Kazakhstan, as a whole, will become the driver of the economy over the next few years. A good indicator for us is the fact that, over the past two years, the base of new customers in the SME segment has grown by 82%, and the total SME customer base is now about 55 000.