Trends and prospects for SME lending
In 2017, the negative trends in SME lending gave way to positive dynamics: growth in loans amounted to about 20% on average for countries in Eastern Europe and Central Asia, and some banks recorded 40-50% growth.
The increase in aggregate debt of SMEs occurred primarily due to:
- the activation of operations of several banks, primarily in the medium-sized business segment. From communication with the leaders of business lines of SMEs, one can still note low interest and low activity in terms of lending to the micro-business segment;
- activation of SME lending by state-owned banks (especially in Russia and Ukraine), which carries the risk of further concentration of the segment on the part of state-owned banks;
- stimulation of banks through government support programs for SMEs (Kazakhstan, Belarus);
- active cooperation with European financial institutions, in particular, EBRD, EIB (Georgia, Armenia, Ukraine).
At the same time, in all countries of the region the number of actively lending banks remains relatively low and does not exceed ten. In the future, the level of competition in the market will primarily depend on the involvement of banks in state programs to support SMEs and the introduction of new technologies.
Growth in loans amounted to about 20%
The current indicators are significantly better than the dynamics of the past, but in absolute terms, many managers note that the volume of loans is still far from the pre-crisis level of 2007.
Among the factors that can positively influence the growth of SME lending, we can note:
- the emergence of credit registers already in 2018 in Russia and Ukraine, the creation of which was initiated by banking regulators of both countries;
- further development of alternative sites (in particular, crowdfunding) and their legislative regulation;
- development of government programs and guarantee systems for SME support (expansion of programs in Russia, Ukraine, and Kazakhstan is planned);
- creation of a unified database of information support for SMEs.
At the level of individual banks, according to experts, the following factors can have a positive effect on the growth of lending:
- introduction of new risk management technologies;
- increase of the general level of service digitization (including further development of digital banking, online lending);
- These trends contribute to shorter application review times.