SCB Talks about its Corporate and SME Dept

Give us a brief history about SCB

Seychelles Commercial Bank formerly known as Seychelles Savings Bank is amongst the top Commercial banks in Seychelles. Research suggests that this bank was amongst the first, if not the first one to be opened in Seychelles. Although the mandate of the bank was different back then, today it can take pride of being a fully pledged bank with the capacity of financing small to large scale loans.

The foundation of the Seychelles Commercial bank is reliant on its 99.9% local workforce. This is not only a great advantage but demonstrates the bank’s commitment in the development of its Seychellois employees.  One of the areas of focus is the Corporate and SME department whereby our team assesses business plans presented to the bank by individuals or companies for business startups or business growths. Mrs. Kelly Naidoo who heads this department gives us a broad overview of her tasks and vision for her department.

The role of the Corporate and SME Department

The department assists businesses of all sizes from micro to small and medium as well as large corporate businesses classified as per their annual sales turnover. We provide financial guidance and assistance to businesses whether they are starting out or want to expand. 

The unit was formed in late 2013 when the Bank changed its name from Seychelles Savings Bank to Seychelles Commercial Bank and embarked on a dynamic transformation journey where it began offering commercial banking activities like other commercial banks. However, to this day, one of the bank’s main challenges is in changing the customers’ continuing perception of the bank from being a ‘personal savings’ bank to a fully fledge commercial bank offering banking services to both retail and corporate customers.

How is the bank bouncing back from the Pandemic?

Prior to the pandemic which severely affected the country’s economic landscape and ultimately the business customers, businesses were booming and debt servicing were on track. Unfortunately, all changed in 2020 with most businesses being severely affected by the pandemic where they could only resume full operation more than 12 months later. Forbearance mechanism and relief packages had to be provided to the customers to help them sail through Covid’s rough seas. There is still some element of uncertainty lurking around today, but we need to take an optimistic stance to keep pushing forward to recover and grow with our customers.

What are the most common sectors that the Seychelles Commercial Bank finances?

The most common sectors are construction, trade and transportation. Banks should endeavour to spread the risk in all sectors of the economy by lending in various industries and avoid concentration in only few sectors for better credit risk management. This is however easier said than done as same is highly influenced by the specificities of the country and economy and perfect portfolio diversification is extremely difficult to achieve. It is also important to note that some sectors are by nature riskier than others and lending in these sectors needs to be done prudently.

On average, how long does it take for a client to know that they are eligible for a loan?

One of the greatest advantage of Seychelles Commercial Bank being a purely local bank, is that all credit approvals are done in the country.  Unlike most of the other commercial banks that will have to seek approval with their head offices overseas, with SCB, all approvals are given in-house and depending on the credit facility amount and complexity of the proposal, customers are given a response ranging between 1 week minimum to 1 month maximum. However, during this period, there is ongoing communication with the customer to keep them updated on the progress of their application and clarify any queries.

When taking a loan, sometimes people do not understand the risks and that they need to have collaterals? What are collaterals and why do we need it?

When assessing a credit request, banks should not rely heavily on the aspect of security alone. For business loans, emphasis should also be placed on the purpose of the facility, feasibility of the project, track records, background of the promoter(s) as well as the repayment capacity. A bank’s financing is considered safe only if the business can generate adequate internal cash surplus to meet the loan repayment. It would therefore be wrong to think that banks lend against collateral although collateral is taken as a form of insurance to fall back upon in the event of any unforeseen developments taking place that would jeopardize the safety of advance. Accepted collaterals or security for an advance are; cahs lien on deposits, charge on a property, pledge on movable assets such as a motor vehicle and personal or company guarantees. Securing a credit facility with a movable or immovable asset will also require the assignment of insurance on the asset in favor of the bank.

As the Corporate / SME department, what are the major difficulties that you face with clients?

Some micro and small businesses so often lack the financial discipline or the necessary skills and fail to maintain a proper book keeping for their business transactions causing them to struggle to provide the bank with a realistic picture of their business when applying for a credit facility. They prefer to transact with cash on hand rather than banking their business income which makes it problematic for them to get a loan when there are no proof of their business income with a poor account turnover and track record. Some businesses under-declare their business dealings or mismanage business funds causing them to struggle when raising funds or meet their financial obligation when due.  Lack of collateral as a safety for the advance remains a major setback for small businesses.   

Why would people opening up a business consider SCB as opposed to other banks?

Our approach, good customer service and fast turnaround time in the provision of our services. In all of our dealings we put ourselves in the customers’ shoes and go the extra mile to ensure that their financials needs are taken care of. We also offer attractive interest rates and lend on competitive terms and conditions.

Would you say your clients are satisfied with the services of your department?

Yes. Of course, there is always room for improvement as we try to keep up with the customers growing needs.