Q: What measures has the bank taken to cater to SMEs in the past 12 months?
A: SDB bank is predominantly focussed on SMEs as its origin is associated with Sri Lanka’s cooperative movement. As such, micro, small and medium enterprises (MSMEs) and SMEs comprise 30-40 percent of our portfolio, with our products and services catering to these businesses.
For example, the SDB Divi Saviya Loan Scheme is geared to help micro- entrepreneurs such as those with home businesses. Furthermore, we collaborate with entities that work with these businesses including microfinance organisations. Through these efforts, we largely concentrated on help-
ing these sectors and in turn the country last year.
Q: How does the bank view its role in helping businesses weather the impact of the pandemic?
A: I doubt any company had business continuity plans for a crisis such as this but you have to conceptualise different strategies to counter it
As this is a health related matter, we aimed to eliminate such risks from day-to-day operations to protect our staff, customers and other stakeholders. In my view, we have been quite disciplined in terms of following the guidelines prescribed by health authorities over the last 12 months.
From a business perspective, the global nature of the pandemic impacts Sri Lanka, banks and customers. However, SDB bank is in a unique position given the scale of its operations and target customers so we have been somewhat unaffected.
Additionally, we were able to help 33,000 customers through the credit moratorium, accounting for loans of around Rs. 25 billion. We see this as our contribution to the COVID-19 recovery effort.
The bank also aimed to help SMEs with educational pro- grammes in partnership with the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka), focussing on managing businesses in terms of forecasting, cash flow management and so on.
Over the last year, we have learnt how to deal with COVID-19 so I’m optimistic about business outcomes in 2021.
Q: Are prevailing interest rates conducive to business expansion, in your view?
A: Lower interest rates are a positive development as this motivates and enables local enterprises to seek credit. The drawback is that deposit rates also reduce, negatively affecting people who depend on interest income.
Without the low interest rate regime however, we may not have seen credit growth last year. Therefore, I view these reductions positively – particularly for SMEs.
Q: What is your take of the work from home (WFH) concept and how it has impacted the bank’s operations?
A: I believe WFH or remote working can transform business models in Sri Lanka.
Banks have used centralised models for a long time although it isn’t necessary that some operations be conducted from a central location. We must facilitate operations for a WFH model that works.
For example, SDB bank delegated to and empowered line managers to get their jobs done. To help maintain data privacy and confidentiality, we enabled people to access bank systems through secure technology.
Additionally, we introduced digital signatures, upgraded smartphones and paid data costs to facilitate WFH. With these measures, productivity has remained the same as in traditional operations.
When adopting a WFH model, further adjustments were needed to serve customers – as previously, these interactions took place in person. However, we have been able to address this through technology. We need to facilitate all operations so that WFH becomes a normal occurrence. SDB bank aims to continue with this model to increase efficiency and offer flexibility.
Q: To what extent is digitalisation impacting the banking sector?
A: Digital adoption has helped reduce the impact of the COVID-19 pandemic, enabling people to access banking services.
For instance, in the early days of the crisis, we were nearly ready with the infrastructure to deliver these services – our ATMs, mobile app and internet banking services were operational.
The banking sector worked together to promote these technologies and create awareness, helping the country shift from a traditional economy to a more digital under-taking, as people became accustomed to digital payments and ordering online.
If we digitalise all aspects of banking operations, a WFH concept that provides end-to-end solutions for better out-comes can become a reality.