Archive for the ‘Banking’ Category

In an age of ‘get-it-done-yesterday’, portable communication device manufacturers are constantly researching and developing innovative technologies to enable end users to effectively deal with the barrage of communication. One of the features that seems to be revolutionising the cellular phone industry is the introduction of the Push Email function on all Personal Digital Assistant (PDA’s) and Smartphones.

Currently there are 1.9 billion wireless subscribers worldwide and 1.4 billion email accounts in existence, the potential for mobile email access is significant. With electronic mails becoming the ubiquitous form of communications across the globe, device manufacturers have seen the huge market potential and have incorporated improved functions that enable end users to access their email faster.

Push email is growing more and more popular having received a good response in the region. UAE has the highest number of subscribers to this service in the region, for many reasons: the UAE has become an important business hub of the region, with a number of multinational companies opening regional offices in Dubai and having executives who travel a lot across the region.

Small and Medium Businesses (SMBs) have a sizeable mobile workforce like managers, field workers, sales and marketing personnel, who need constant connectivity to access latest information are moving towards using mobility solutions for higher workforce efficiency.

What is Push Email?

Push Email incorporates a mail delivery system that literally ‘Push’ emails through to the end user as soon as it arrives. In other words unlike the current system wherein, the user has to manually ‘Pull’ emails from a server or Internet Service Provider (ISP). Push Email smartphones are constantly updating the mailbox with emails without the need for the user to intervene.

A push application is designed to simplify and enhance the distribution of data to mobile employees. Users do not have to request or download the data, because the push application delivers the information as it becomes available. Complete wireless synchronisation of not only email but also Calendar and Contacts means the mobile phone becomes an extension of the office.

The reason that Push Email is a breakthrough technology is best highlighted when compared to the current pull email method of email delivery. Pull email requires the client to login and the Mail User Agent polls the server to check the status; whether there are email pending delivery. If there are email located on the server they are pulled or downloaded into the users mailbox.

According to Mr. Osman Sultan, CEO of Du, “It is important to communicate that wireless access to communications and information is no longer a luxury reserved for top executives—it is a business necessity for mobile workers and corridor warriors throughout organizations. It is also important to communicate the versatility of the solution and the devices in accessing the service.”

Technically, emails are already pushed from the initial sender to the email delivery agent (server), what the new Push Email function does is ‘extend the push’ through the last delivery stage i.e. to the end user’s mailbox. This key functionality is what separates traditional pull emails from Push Emails.

Bridging the connectivity gap

Some 51 million smart phones were shipped in 2005, representing 6 percent of all wireless handsets, according to iGillott Research. The research company predicts that the devices will account for 21 percent of all hand-helds by 2010. This increased adoption of smartphones is due to the improved connectivity while on the move with Push Email that offers 24/7 access to important business data.

In the non-stop world of business today the concept of ‘always-on’ connectivity and zero downtime are universally favoured. The Middle East market and vendor community are catching up with the rest of the world in the mobility solutions space. From senior executives to field sales force across large enterprises and SMBs, Push Email is witnessing a robust growth across various sectors.

For new technology, such as Push Email, to become popular the key element needs to be ease of use, security and performance. Mr. Ivan Ducournau, Business Notebooks and Handhelds Product Manager, PSG, HP Middle East states, “First of all, devices that support push email have to be simple to configure and use. The device should either be set up on the point of purchase or remotely by the telecommunication operator as soon as a user signs for a Push-Email service. End users should also be informed of the security offered with their Push-Email service. For SMB’s, a VPN solution can even be set up for optimal security. Finally, end users are looking for devices that offer uncompromising performance – devices that do not lag or hang.”


However, the slow transition from pull email to Push Email is due to the issue of connectivity. On cellular or mobile devices the end user is not always connected to the Email server or Mail Delivery Agent. This is a common occurrence because the cellular device used by the end user will change network addresses based on location. For example, a user with a smartphone using a Wireless (WiFi) connection may be assigned a different address by the network server. With no constant network when new email arrives to the email server, it does not know what address the client is currently assigned.

According to Mr. Raed Hafez, Motorola’s Portfolio Director, for Middle East & Africa, “To ensure that the end user can adopt Push Email technology it is important to have a strong, easy to use, and common software platform. Second, tight integration and partnership with leading email service providers and push-email technologies is necessary. Last, a strong technology background and deep experience in developing mobile devices.”

In addition to simplicity, customers look for durability, battery life, look & feel, and of course price. It is also critical that the device connects to most mainstream email service providers and technologies. It is not enough to be able to connect to a single type of service. Companies adopt different technologies, and the device needs to be flexible enough to connect to all of them.

“At Motorola the focus is to complete the offering by partnering with local IT providers to assist with the deployment of push-email systems, added Mr. Raed Hafez. “Working with operators who provide a push-email service is critical to simplify the start-up experience for the customer.”

To ensure top-of-mind awareness and encourage purchase, a device manager needs to highlight how simple the process of connecting the device to their current service, as most SMBs don’t have a dedicated IT department assisting them.

“There are a variety of options in push email devices from various manufacturers such as RIM, Seven, Visto, Nokia and Microsoft, added Mr. Osman Sultan, CEO, of Du. “They may differ on their specifications and price but all offer the same convenience – that of push email.”

Last but not the least, it is important to note that the customer is purchasing a device for multiple purposes. While being connected is critical, other typical mobile phone functions are important too. The manufacturer needs to highlight how the device brings all of these functions together in an easy to use and affordable package.

Responding to the question about what end-users were looking for in PDA’s or smartphones Mr. Vishnu Madabhushi, Executive Director for HTC Middle East & North Africa opined, “Customers are looking at devices that support high-speed network connectivity like 3G HSDPA, HSUPA and alternative modes of communication like Wi-Fi and Bluetooth, which allow them constant wireless connectivity to leverage the Push-Email feature, and ease-of-use with hardware and software features such as jogger wheel, TouchFlo, ViewFlo, to easily access and scroll through the information.”

Device Manufacturers and Service Providers

Push-email is ubiquitous in most business sectors in the UAE. The service is either provided by private systems or via public services offered by the operator. In the UAE this is Etisalat and du. Of the two operators Etisalat was first-to-market with the introduction of integration and support for the BlackBerry device.

According to Mr. Shady Saeed, Senior Manager Product Marketing,Wireless for Etisalat, “The best way to gauge if a market is ready for Mobile Push Email technology is to assess the maturity of the market in terms of using emails as an official method of business communication. The economic growth in the UAE is testament to the fact that almost all businesses are mature enough to adopt Push Email to enhance mobile business processes.”

Sidebar – Did you know your “non-smart” cell phone can easily be converted into a Smart Push Mail?
Firstly, you don’t need a BlackBerry. Push Mail is actually available for just about anybody even with the most basic handsets provided they have a data-plan enabled. Whether its Motorola, Sony Ericsson, Nokia or just about any handset, smart or non-smart, as long as it has a data connection you can enable Push Mail on your cell phone.

Consilient Push allows you to download an application from http://www.consilient.com, and on enabling it you can receive emails besides being able to forward, save photos, create your own signature and view attachments which include PDF, ZIP, Excel and Word on your mobile phone.

The effective use of mobile Push Email technology can only be achieved when a market is mature enough. In addition to having sophisticated devices, the market should also have a service provide who can integrate Push Email functionality and provide end-to-end support. BlackBerry were the only devices that were capable of handling complex algorithms that were needed to effectively use the Push Email solution.

“Maturity of the solution itself is not the end-all, the components need to be mature as well in terms of efficiency and ease of use,” added Mr. Saeed. “Etisalat offered integration and support of BlackBerry as they were the first to bring this system to market. However, going forward Etisalat will offer integration with other devices as well to offer end users more flexibility.”

When looking at the cellular and smartphone market today, BlackBerry is no longer the only device that offers efficiency, security, and lower cost of ownership. As more companies relax the policies on single devices for its executives on the move we can be sure that the smartphone market and technology incorporated in these phones going to increase exponentially.

“We see both, SMB’s and large organisations showing great interest in implementing mobile enterprise solutions to make use of the Push-Email functionality, added Mr. Madabhushi.. “Most of these already have deployed Microsoft Exchange Servers for corporate e-mail and can easily leverage the Push-Email functionality on their Windows Mobile based devices without any additional costs/infrastructure.”

Leader of the Pack

Leading the pack of devices that offer Push Email functionality is BlackBerry. One of the pioneers, BlackBerry PDA’s offered Push Email and has gained the top-of-mind awareness of all consumers. By being the first-to-market BlackBerry has become synonymous with on the go connectivity. With the increase in popularity of the Push Email feature; numerous device manufacturers have incorporated it into their devices. Some of the manufacturers who have incorporated push email include Nokia, HTC and Sony Ericsson.

WordWise:
Think ‘Googling’ is synonymous to search? Blackberry is as much part of the urban dictionary as Google now. With more than 10 million Blackberry users globally, the ability to read e-mail that is received in real-time, anywhere efficiently, has made the BlackBerry devices addictive, earning them the nickname “CrackBerry” – particularly one used obsessively.

Use of the term CrackBerry became so wide spread that in November 2006 Webster’s New World College Dictionary named “crackberry” the “New Word of the Year”. This term combines crack (short for crack cocaine, a narcotic) and BlackBerry devices.

For the busy entrepreneur or owner who needs to access to Push Email and is willing to pay for good service there is Seven: that works across all standard platforms such as Windows Mobile, Palm OS and Symbian. Enabled for almost 240 CDMA and GSM devices it is sold through 115 operators across the globe.

For the paying segment of Push Email users there is currently an intense rivalry between BlackBerry and Windows Mobile. According to a report from market researcher IDC, within 15 months of its launch, Windows mobile had sold 100,000 units creating a market share of 30.5 per cent in the data-centric converged devices segment over Blackberry, which has a 19.1 per cent share.

Manufacturers such as HP are offering cutting edge advantages, which rely on the Push-Email technology, to work from anywhere and stay one step ahead. According to Mr. Ducournau, “The iPAQ 514 offers a new dimension to users. Instead of typing-in email replies by using the keypad, they can ‘Voice Reply’ to them. Their voice will be sent as an email attachment. A clear sign that device manufacturers are looking for a competitive advantages and the early entrants have to keep up or risk getting left behind.”

What should you buy?

Across the world, it is a clash between devices based on Windows Mobile and those running Blackberry. Statistics and reports vary on whether Windows Mobile, Blackberry or iPhone is the best PDA/smartphone. While the debate rages on, the end user should be aware that the operating systems are the more crucial element to be considered when making a purchase decision. Both Windows Mobile and Blackberry operating systems support corporate e-mail (including Lotus Notes and Outlook) and personal e-mail (such as from POP3/IMAP and Web mail accounts). However, Windows Mobile 6 does a better job integrating popular mail applications without any additional configurations required.

Advisor check List:
1.) A Windows Mobile 5.0+ device that is Direct Push enabled. Some early devices were released without Direct Push Technology. Go to http://www.windowsmobile.com and look for Upgrades for Direct Push Technology for select devices. For other vendors, check with the vendor or with the local telecom operator.

2.) Access to Exchange Server 2003 Service Pack 2 for synchronizing e-mail messages, Contacts, Calendar and Tasks.

3.) A data plan, server sign-in information and approved access to Exchange Server 2003 SP2 by their network administrator.

4.) Make sure you have your spam filter and anti-virus configured. Some models come inbuilt with these services are offered at the server level.

5.) Besides the handset costs, check the rates for data transfer and other fine print.

6.) Prioritise from who and what accounts you want Push Email activated. If you are a high volume email user, you could get flooded with emails 24/7

Mr. Madabhushi added, “Key features of smart phones such as HTC offer numerous features such as User-friendly interface, a range of connectivity options such as UMTS, EDGE, GPRS, WAP, Wi-Fi, Bluetooth that ensure constant connectivity and Fingerprint Authentication or Device PIN Lock that ensures data protection in case of lost/stolen devices.”

Both operating platforms incorporate push e-mails to cellular devices. But BlackBerry has the edge in this category because it automatically performs the task for you. The end user has to manually configure Windows Mobile 6 e-mail. As mentioned before the ability to search for e-mails has always been a feature on BlackBerrys, while Windows Mobile has recently added the feature. The Push Email function of Windows Mobile 6 offer the best benefits if you use Microsoft’s Exchange Server 2007

According to Mr. Sultan, “A Telecom services need to have a sound backend platform to offer push email. From customers’ perspective, Nokia solution depends on piece of software on the mobile phone and on the company e-mail server. Microsoft solutions needs Microsoft Exchange server 2003 with Service Pack2 or higher and Windows mobile operating system that support Push technology like Windows Mobile 5.0 V2 or 6.0. These solutions need a reliable connection with the local operators.”

The popularity of webmail (gmail, yahoo and hotmail) as the default email provider for many end users can be attributed as one of the factors that has led to the adoption of BlackBerrys as the default choice. BlackBerry allows users to download standalone gmail applications directly to the device hence making it much more user-friendly. While Windows Mobile do not support these applications users can set up gmail access through POP3.

Security Issues

While smartphones that offer familiar software platforms such as Microsoft’s Windows Mobile, to attract users and make embrace simplicity, these devices may feature unwanted add-ons. Microsoft has engineered mobile Push Email so that the information is easily accessible, however, there is a lack of on-board encryption for email files on Windows Mobile devices. This feature leaves the end user’s device vulnerable to data loss.

Mr. Ducournau adds, “Device manufacturers need to make sure that their push email offering is compatible with users’ working environment. Microsoft push email pre-loaded on HP iPAQs ensures a full integration of the solution with Windows operating systems and outlook. SMBs can either choose to manage the security aspects by putting in place an end to end solution through Microsoft exchange server or eliminate any complexity by subscribing to services offered by telecommunication operators. Corporations can protect access to their intranet by enabling VPN offered on some devices.”

When synchronising between Exchange and Pocket Outlook; the use of only a password is an insecure approach. End users are comfortable using the PC based applications, but users with sensitive data, will be concerned that the Windows Mobile lack of encryption creates an easy target for hackers.

Commenting on the security issues of using Mobile Push Email technology on hand-held devices, Mr. Saeed added, “The point of contention where the security breach can happen is the device since the data that is sent from the server is encrypted. The solution that is currently being implemented is to enable smartphones with more processing capacity which can handle more complex algorithms.”

While newer hand-held devices are incorporating security features, the Trusted Computing Group’s Mobile Phone Work Group has issued a draft of its Mobile Trusted Module standard, which is meant to establish guidelines that help wireless device and software makers improve the security of their products. This will ensure that individual end users as well as corporation can be assured of higher security levels when using Push Email on their smartphones.

What the future holds

Push email is currently mainly for business use. However, the device needs to be able to provide access to both business and personal emails simultaneously. Over the last couple of years there has been a strong adoption of this technology and most industry experts expect this trend to continue. The natural progression is to convert more complex business processes onto mobile platforms.

“Wherever strong economical growth is occurring, you see a strong demand for staying connected at all times.” states Mr. Hafex. “Having information access at your finger tips, and being able to communicate through different media at an instant has become the norm of modern business.”

Hot Tip:
PS – A similar service Flip Mail (http://www.teleflip.com) currently available only in the US on select carriers is expected to be available in UAE in 2009. Flipmail claims to work on any cellphone, any email account.

When a technology is introduced, it is first accepted by early adopters and early mass which is represented by professionals and technology fans. Push-Email acceptance from consumers is growing but still limited. In order to increase the penetration into the consumer market, device manufacturers will have to enrich their offering with new features and software.

According to Mr. Sultan, “The consumer interest level for push email in this market is very high. We believe that an increasing number of mobile operators are going to offer Push email service to their business and individual clients leading to a further adoption from companies to have this service for their employees.”

In addition, work is now 24-7. This means that the need to being connected is more important than ever. Consumer mobile devices (non business devices) will also support push-email to ensure their viability as a second or “weekend” device. Bad news for one’s social life – but hopefully good news for the economy – as 24/7 business can only mean upward growth.

Introduction:

Statistics released by the International Finance Corporation and World Bank Group in January 2007, show that on an average 80 per cent of the total regional business and employment market is made up of SMEs, and this figure is as high as 86 per cent for the UAE.

Small and medium enterprises (SME’s), from a 2 person operation to a 50 strong business, are duly considered the backbone of a country’s economy. In the Middle East alone SME’s make up a sizeable portion of all the businesses incorporated on an almost daily basis. Yet across the board most financial institutions and banks have only recently created specific banking products targeted to the SME sector.

Most entrepreneurs face a catch-22 situation of having to be credit worth to get funding from financial institutions, on the flip side SME’s have to be in business for 1 year or upward to be credit worthy. Even if financing is available, the products available are ‘collateral based lending’ usually offered by traditional banks and finance companies, made up of a combination of Asset-based finance, Contribution based finance, Financial statement lending, Credit scoring and Relationship lending.

Fully secured lending is still the most prevalent form of financing available for SMEs. Most banks still believe that SME financing is riskier than financing medium to large corporate
businesses. The main reason behind this thinking is the higher rate of defaults amongst SME. For this very reason, banks are more inclined to fund SME’s with a track record of at least three years. Traditionally and it has been proved that if a start up can survive it’s first three years then chances of that business being a success increases tremendously.

In some instances Viability based finance is offered in the form of venture capital, but again the business has to project sizeable returns over a relatively short span for 3 years to 5 years. But it is not all doom and gloom for entrepreneurs as this phenomenon is common in most emerging economies.

Bridging the SME Finance Gap:

As stated earlier most SMEs find themselves in the proverbial ‘chicken and egg’ situation most SME’s do not have sufficient collateral required for collateral based lending, and cannot show high returns to justify the risks taken by venture capitalists. In addition, the Middle East markets have little or unreliable information, limiting the effectiveness of financial statement lending and credit scoring.

However, there have been significant changes in the attitudes of banks towards entrepreneurs and SME’s in the Middle East and the UAE in particular. At present there are few avenues of borrowings, on an unsecured basis,
available to SME. Most of the financial institutions offer fully secured. However, some banks have started lending on an unsecured basis. Such type of lending, lower loan values and, may not be suitable for medium size companies.

There are facilities available for loans against collateral and some loans on an unsecured basis. Banks also see this segment as a potential for cross sell opportunities. There are ample opportunities available to sell personal Wealth Management and other related products to the business-owners from this segment.

Additionally, financial institutions are broadening the viability based approach. This approach focuses on the type of business and offers more than just monetary support. With the added emphasis on business development there is a clear reduction in risk and the opportunity for the financial institutions to benefit from the increase in returns.

Lloyds Small Business Award (SBA):

Every year Lloyds TSB organises the Lloyds SBA an event that honours SME in different categories from innovation to Entrepreneurial Start-up Award. The main prize for the Lloyds TSB Small Business of the year Award is US$ 13,614.33 directly credited to the winners account. Reinforcing Lloyds commitment to helping SMEs in this region.

It must be stated that the rate of return or value of returns will not be attractive to venture capitalists (VC), this mode of financing is better than collateral based lending. However, this mode of financing does reduce the risk profile of the business and that is always attractive to Venture Capitalists.

Financial Options Available:

In any economy SMEs play an important role in providing the necessary impetus for overall growth. SMEs act as the lubrication for well run machinery in expanding economies. They provide the continuous churn required to enhance and grow any economy. The economic expansion of the UAE has also led the banks to offer efficient, cost effective and comprehensive solutions for SME financing.

Every bank has its own lending criteria. However, at the minimum level every bank looks for three years of audited accounts from the SME. Based on the products available with a particular bank, additional requirements, like gearing ratios, profitability, management stature etc, are then taken into consideration.

List of banks offering SME Banking Products:

  1. Abu Dhabi Commercial Bank (ADCB)

Abu Dhabi Commercial Bank is one of the UAE’s most successful local banks. ADCB’s SME package offers Financing, Trade Services, Cash Management and Treasury & Investments tailored to meet your requirements. For more information please visit:

http://www.adcb.com

  1. ABN Amro

ABN Amro is an international bank with a global network of more than 600 offices in 50 countries. ABN Amro offers a range of products and services for SME customers, local entrepreneurs and multinational corporate . For more information please visit: http://www.abnamro.com/

  1. HSBC

HSBC is one of the largest banking and financial services organisations in the world. In the UAE, the HSBC group is represented by HSBC Bank Middle East Limited (HBME). HSBC offers a unique ‘SME banking with protection, competitive rates and many more benefits. For more information please visit: http://www.hsbc.ae

  1. Lloyds TSB

Lloyds TSB is a branch of the UK based Lloyds TSB Group, the UAE branch has been operational since 1977 and offers personal, private, business, corporate and offshore banking services. Lloyds has a comprehensive SME portfolio and offers a dedicated relationship manager and many other facilities: Please visit the website: http://www.lloydstsb.ae

  1. Mashreq bank

Mashreqbank psc. is the second oldest Commercial Bank in the UAE having originally been established as Bank of Oman Ltd. In 1967 in Dubai. Mashreqbank     offers convenient SME banking with trade and working capital and merchant overdraft in addition to competitive rates Please visit: http://www.mashreqbank.com

  1. RAKBANK

RAKBANK is the trading name of the National Bank of Ras-Al-Khaimah, a public joint stock company headquartered in the emirate of Ras Al-Khaimah. The bank offers low interest rates, flexible repayment periods, minimum formalities and high loan amounts for SMEs. For more information please visit:http://www.rakbank.ae/

For SMEs that meet the criteria set out by the banks and financial institution there are a range of banking products and services on offer. Based on numerous factors the principal of which is time; banks are providing products and services that help SMEs become more efficient and effective.

To help SME’s manage their business cash flow better, some banking products and financial services offered are; Current Accounts, Fixed Deposit, International Trade Account, FX & Treasury and Cash Management Facilities. Additional products that help keep costs low and generate significant savings are free electronic funds transfer (EFT), free cheque collections, free demand drafts and free inter-branch banking.

SMEs can also benefit from some of the add-ons offered with these products including sweep in facility linked to fixed deposits, local cheque book, personalised payable at par cheque book, monthly statements by courier and e-mail, phone banking, third party transfers through Internet banking – usually at no additional cost.

An entrepreneur or business owner needs to realise and ensure that the services and products offered by a bank or financial institution help in meeting every challenge from day to day administrative details to business expansion. In addition, these packages should help a SME save on huge transaction and transfer fees on their bank accounts.

Advisor Checklist:

A bank or financial institution should be treated as a partner whose aim is to help you; the entrepreneur or small business owner, make the most of your time, money and resources so as to maximize returns. With more than 52 banks in the UAE alone, and more cropping up every month, choosing a bank, that fits your unique can be a daunting task. With most banks offering similar services, its hard to choose the right one. However, here are few things to watch out for:

1.) Location

Close is not necessarily better. Consider whether or not you are willing to pay higher fees for better location, or if lower fees may be worth a little travel. Besides the location, check with the ATM locations. Other factors such as opening hours; telephone and online banking facilities; interest rates and savings options; borrowing facilities; merchant services and introductory offers also should play an important factor while deciding on your bank.

2.) Global or local

MNC banks are great with a wider range of services, but then as an SMB you could be one more company, amongst millions of customers. If your business is largely restricted to the UAE, then do consider a local bank.

3.) Minimum Account Balances

Many banks require balances of in order to get free checking or savings accounts. Consider the amount of interest you might earn on that same amount if placed in a savings account or a CD. also compare the monthly general maintenance fees charged by banks on checking and savings accounts. If you routinely keep enough money in your checking account to meet the minimum balance, gaining interest on that money is a bonus.

However, if you don’t to meet the minimum balance requirements, an interest bearing checking account usually will have a higher monthly fee than a one that does not earn interest. Many banks are now charging high fees for copies of canceled checks,account research and copies of bank statements.

Overdraft protection is a service that can be very helpful to avoid returned check fees. Be sure to carefully review the terms of the agreement before you sign. Some banks are actually offering short term loans as overdraft protection, which requires a credit check and they charge you interest on the money loaned to you by the bank to cover what would otherwise be a bounced check and they might still charge you a fee for the service.

4.) Fine Print

Read the fine print about how the bank calculates fees if you fall beneath this minimum balance. One way is to charge a fee if the average daily balance over one month is lower than the minimum another does it immediately upon the balance falling.

Charges Per Transaction –

Along with the monthly fees that many banks charge, some also charge fees per transaction, such as writing a check, moving money from one account to the other, checking balances at your an ATM, or withdrawing money through an ATM. These fees and really add up. Be sure to ask for and thoroughly review a list of all fees charged by the bank.

5.) Electronic Banking (Internet/phone/mobile)

A fast growing area of most banks is online banking services through which all banking transactions can be done from a your pc with Internet access. Ask if the bank charges a monthly access fee for these services. If you to use online banking services to pay your bills, the bank may charge a monthly fee for this service, although more banks are now offering this for free.

6.) Ask for customer references and a relationship manager

Most banks will ensure that your account is dealt with a dedicated relationship manager. Ensure that you keep lines of communication with you relationship manager open and continuously follow-up and maintain a relationship – it is a two-way street. If you call up only when you ned something it might not be as effective as having an on-going relationship.

7.) Test run

Sit with your accountant to run through 12 months of possible transactions, to help you stimulate your typical month of banking transactions. This will help you plan accordingly.

8.) Weigh alternatives such as Islamic Banking

Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law (Sharia) principles and guided by Islamic economics. In particular, Islamic law prohibits usury, the collection and payment of interest, also commonly called riba in Islamic discourse. In addition, Islamic law prohibits investing in businesses that are considered unlawful, or haraam (such as businesses that sell alcohol or pork, or businesses that produce media such as gossip columns or pornography, which are contrary to Islamic values).

Other Cash options:

A new model of finance is Bartercard (www.bartercard.com), a unique service network that is not funded on a cash basis but by goods and services exchanged or bartered with other Bartercard members. Unlike traditional credit, debit cards or cheques, a Bartercard transaction requires member businesses to exchange goods and services with each other for ‘Trade Dollars’.

These Trade Dollars are credited to the member’s Bartercard account when goods or services are exchanged. Members can then utilize their Bartercard Trade Dollars to purchase goods and services from any other Bartercard member. Members save valuable cash flow and boost their profitability by taking advantage of the Bartercard network.

Bartercard is committed to helping SMEs grow and achieve financial success by facilitating a trade exchange network that offers dynamic and effective ways of conducting business. Although the concept of barter is thousands of years old, bartering through Bartercard is the most innovative way of combining modern technology, a community of businesses, and indirect and direct marketing channels to improve customer base, sales, profit and cash flow.

Going forward:

The SME market is growing exponentially. New businesses are opening everyday. Banks are also realizing the importance and growth potential of this market segment. Therefore, you will see a lot more focus from the Banks to develop their own products and services aimed at this segment.

Overcoming the biggest hurdle, that of, offering unsecured credit facilities to the SME sector due to lack of financial information available. In the absence of the corporate credit bureau,
banks cannot make an informed decision about the financial health of a company. So financial institutions are adopting a program lending approach towards structuring credit facilities for SMEs.

Banks are already making headway with products and services focused in this segment with a number of new products slated for launch over the year. SME’s who are established for over three to five years would make a substantial base for banks to offer credit facilities. Product offering based on a lending module where companies fitting the parameters would automatically qualify for some unsecured credit facilities could be a reality for some SME.