CIB and SMEs: Awareness, perseverance, trust

BBJ: As SMEs are considered to be the backbone of – and a main driver for –both the global economy and individual countries, how do you think Hungarian SMEs contribute?

Róbert Szerdahelyi: The SME sector is the one of the most important player in today’s Hungarian economy, even if the majority of SMEs face a lack of capital. During financial negotiations with our clients, our experience is that the main focus of financing is overcoming a lack in funding but the situation is much more positive than five years ago – at the beginning of the crisis.

BBJ: Along with credit, what else do SMEs need for their daily operations and long-term survival?

R.Sz:Generally speaking, the SMEs are on a wide spectrum; involve a lot of type of companies. Inside CIB, SME department focus on middle-sized enterprises – ranging from HUF 200- 300 million to HUF 10 billion – is the CIB SME division, which has been handled separately by CIB since the beginning of 2010. Separating this division was an important and successful step. The demands of this segment involve current asset financing, prefunding of tender proposals and investment credit. Which is a massive segment of SMEs is the upper division, which is less characterized by a lack of capital. This segment sees more capacity building and investment promotion. CIB offers a specialized and well-prepared consultancy service to SMEs segment. Since 2010, we have been building our services in order to meet the needs of SMEs in these segments. A customer survey in July 2014 investigating client satisfaction showed that our clients are open to developing trust towards our consultants and to being partners with our institution. This is reflected by them voluntarily providing a daily information flow for us, which enables us to offer maximum cooperation with our clients. I believe that July’s survey confirmed that our conscious professional development has been on the right track, as both client satisfaction and loyalty produced better figures when compared to last year’s measures.

BBJ: How does CIB help SMEs? Tell us more about your special programs for them. What do your consultants do to help SMEs?

R.Sz.: Let me demonstrate this through an example. Fourteen years ago an automotive supplier started working with us. We provided account management for the company that had annual revenue of HUF 5-600 mln. It was a stable and classic SME on the Hungarian market. During these 14 years we have developed our relationship and cooperation step-by-step. Following account management, we registered a small amount of overdraft facility, which was later raised. The next steps were several investments, tool development programs and lease financing. Now the company has an annual revenue of approximately HUF 5 bln. Our cooperation is exclusive; the company has no ties with any other financial institution. Achieving results like this requires a bilateral and step-by-step contribution of hard work and trust.

BBJ: When a company is beginning a new life cycle and needs new services, do you tell the company about new possibilities, does the company come to you with new demands or is it a mutual decision?

R.Sz.: This is always the result of a joint planning. It is important to note that our main aim is not selling our products but understanding the needs of our clients, in order to offer them services best suiting their plans. Here the client needs to understand that the added value that we provide is worth more than a price advantage of 1-2 percentage points. Thus, we do not want to be the cheapest institution, as we are sure that the service we provide is reliable and high quality, and will earn more in the long-run than through saving money with cheaper services.

BBJ: How are Hungarian SMEs supported by the “Funding for Growth Scheme”?

R.Sz.:The press presence of the “Funding for Growth Scheme” (FGS) has reached its aim, as our clients know about the scheme and consciously look for it when they are planning capacity building, investments and development. This service is also good for financing current assets. Important added value is that our consultants have to explore the real needs of the clients, as in the majority of the cases our clients arrive at our institution saying that they need money. FGS is commonly sought and I believe that CIB was among the leaders in providing this package in the first phase and also in the second phase of the program.

BBJ: What do you think is needed for a successful SME?

R.Sz.: Referring back to the successful automotive supplier, I would say that trust is a key factor. The company needs to trust us to send us information, so that we can work together flawlessly. I believe that a financial institution operates well if stays in the background, unseen. If trust is gained between the two parties, we can foresee critical points and we can prepare to handle them. We have to adjust ourselves to plans of the client, and offer services that serve their needs. In my opinion, many banks make a mistake at this very point: instead of suiting their services to the plans of their clients, they make product offers for the clients, which might not be in line with the real demand of the client.

BBJ: What are CIB’s plans regarding SME sector in the following years?

R.Sz.: Based on CIB strategy up to 2017, CIB SME division outlines achieving and maintaining an active market presence. As an innovative partner, we would like to be an active financing institution for the Hungarian SME sector in the upcoming years. We are continuing our building and planning and we would like to offer innovative solutions for players in the Hungarian SME sector. We would like to be different and outstanding in the sense of consultants and service. We are working to offer real opportunities to our clients and to maintain a prosperous and long-term cooperation.