Retail Banking in CEE: Exploiting the Potential of the Micro Business Segment

2012

Efma and Roland Berger Strategy Consultants, with the support of KBC Bank, have released this report on how banks in CEE approach micro businesses (self employed and small private business customers). It identifies key success factors and areas with potential for improvement.

“Having endured a period during which attention has been focused on the stabilization of bad loan portfolios, by 2011 bankers in Central and Eastern Europe began to start thinking about growth again,” says Hendrik Bremer, a Partner at Roland Berger Strategy Consultants. “The micro business market is an interesting potential target group and offers some attractive opportunities – if approached correctly.”

The report provides insight into how CEE banks handle the micro segment, assessing the challenges of the market, such as the large number and varying needs of potential clients, keeping the rate of non-performing loans low and avoiding high costs of servicing. It reveals that while banks in most countries demonstrate a desire for growth in their micro business portfolio, the commitment and ability to implement varies significantly by bank and by country. For example, in countries where the large corporate segment still provides enough business potential to fulfil banks’ demand, the appetite for fragmented and potentially riskier micro business has limited appeal.