Olexiy Volchkov , FUIB's Deputy Chairman of the Board of Corporate Business gave an interview for the weekly "BUSINESS"
- What is your bank's attention to the segment of small and medium enterprises (SMEs) connected with?
- SMEs is the most profitable and promising category of clients for banks. We went to this segment a few years ago to diversify our loan portfolio and increase the stability of the bank. Now the share of SMEs in the bank's corporate business income has reached 16%, and in the coming years, we plan to enter the Top 5 of the largest banks in this segment.
- What is the emphasis made on in working with this client group?
- Now for the customer of the SME segment it is important that the bank meets four key requirements: reliability, competitive rates, accessibility and quality of service. In the difficult political and economic conditions of the last year, FUIB successfully passed the stress test of the NBU that proved its reliability for customers.
In addition, the main factors allowing us to increase the number of active customers in the SME segment in 2014 by 15%, were the speed and the quality of service and proactive offer of services oriented to the needs of the client. Thanks to the feedbacks from our customers, we have made more than 60 adjustments to the system "Client - Bank" and developed several tariff proposals, taking into account the scale of business customers, consumer profiles and industry sector. We have completely revised the process of opening an account, which allow us to significantly simplify and speed up the procedure for customers. In addition, the bank increased the number of personnel in the call-center, which advises clients of the SME segment. Despite the significant increase in the customer base, the quality of service remained at a high level, what is confirmed by independent "Mystery shopper" research, conducted on a quarterly basis.
- Which credit programs does the bank offer for SMEs? Which are the most popular?
- In the current circumstances, unfortunately, the classic lending is minimized. The fact is that the resources for loans became "shorter". Therefore, the recent credit programs for SMEs are developing in three directions: factoring, i.e. loans secured by accounts receivable, loans for the financing of working capital of companies that sell quickly wrapping goods such as food and pharmaceuticals, and seasonal loans to agricultural companies and farmers owning over 1 hectare of land. In anticipation of the new agricultural season, given the fact that the "long" money became less, we added operations with promissory notes which allow agricultural companies to obtain trade credits for the purchase of plant protection products, seeds and fertilizers. We have also included guarantee operations into the list of services for commercial enterprises, which also allow one to obtain a trade credit and expand their operations without raising funds. Factoring has been the most popular service in the last year. During 2014 the number of our customers that used this service, tripled, and now FUIB is a leader by volume of factoring portfolio among Ukrainian banks. If previously many people were deterred with only the word "factoring", last year all enterprises had to pay attention to alternative forms of financing. Any supplier of goods and services for large enterprises and retailers can benefit from factoring. If the buyer is a financially sustainable organization, the bank can lend to its suppliers at the price of conventional mortgage loans, but trade receivables will be the security. It is enough for the supplier to provide a delivery note to the bank and a week later they will receive the funding. For comparison: formalizing a conventional loan with collateral may take about 30 days and includes an analysis of the financial condition, evaluation and formalization of the collateral.
- What challenges in working with SMEs would you mention?
- Such companies are considered to be riskier borrowers by all banks. Not only in our country but throughout the world. Transparency of small business in Ukraine is at a low level, so the banks experience hardship with making the right decision on granting a loan. In addition, small businesses usually lack the quality of collateral. To work effectively with SME customers, you need to have professionals who understand the specifics of each business and pick up an individual approach to each client. We find these people, constantly educate them and motivate for active work.
- What are the plans for this year?
- We want FUIB to become a platform for our customers to find business partners. For this we are expanding partnership programs for promissory notes and documentary operations, we introduce new deposit products, allowing one to obtain a high income and thus to dispose of the funds freely. In general, this year the fight for the customer in the banking market will be very tight. Customers will easily change the banks in search of more loyal conditions of services. At the same time, we see how temporary administrations are installed into banks. Against this background, we are optimistic about the future as we maintain stability. In addition, during the past few years we have invested a lot into the development of remote service channels and quality of service, what appeared to be a very far-sighted decision in the light of recent events.
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