Leveraging Employee Value Banking to empower MSMEs

This article delves into the burgeoning concept of Employee Value Banking (EVB) and its potential to revolutionise micro, small and medium-sized enterprises (MSMEs) in Ghana. By integrating bespoke banking services into the very fabric of employment, EVB offers a unique platform for enhancing financial inclusion and bolstering the economic backbone provided by the MSME sector. We examine the structure of EVB, its multi-faceted benefits for Ghanaian MSMEs, and the broader implications for the country’s economic landscape.

In Ghana, the MSME sector is not just a business category; it’s the lifeline of the economy, contributing enormously to both GDP and employment. Despite their significance, these enterprises often grapple with financial accessibility, an issue that Employee Value Banking promises to address.

Understanding Employee Value Banking

EVB is a client-centric banking model that tailors financial services to the specific needs of employees. These services typically encompass payroll management, custom credit offerings, savings schemes, and financial literacy initiatives. The key is personalisation, leveraging the stability and predictability of employment to extend superior financial products.

The impact of EVB on Ghanaian MSMEs

1. Financial inclusion: EVB uniquely positions itself to bridge the financial access gap for many employees, fostering an inclusive banking culture.

   2. Employee satisfaction and retention: The provision of dedicated financial services enhances job satisfaction crucial for MSMEs, where the cost of employee turnover can be significant.

   3. Empowering employees financially: Through tailored banking products and financial education, employees can better manage their personal finances, translating into increased workplace productivity.

   4. Easier credit access: Particularly beneficial is the access to credit facilities, a boon for employees who might traditionally be deemed ineligible due to stringent collateral or credit history requirements.

   5. Streamlining payroll processes: EVB can simplify payroll operations for MSMEs, reducing administrative burdens and increasing efficiency.

Case studies from Ghana

Evidence of EVB’s effectiveness in Ghana can be observed in the experiences of local enterprises that have adopted this banking model. For example, participating corporate organisations had positive sentiments on the extent of how optimal employees have turned out in delivering their key expectations. A typical manufacturing outfit over a two-year period had a focused approach to solving teething client financial issues by leveraging on the relationship avenues afforded by the EVB. A culture of high performance is attained all around as the very reasons for absenteeism and other financial hiccups faced by employees is timely solutioned, thereby extending strategies to be capably executed at all times. This emanated also from the carefully designed employee and employer products that remained fit for purpose at all times. The overarching benefit of improved financial literacy and savings among employees is achieved, indirectly boosting the partner organisation’s overall health.

Challenges and path forward

Implementing EVB in Ghana does not come without challenges. These include the need for robust digital infrastructure, ensuring robust data security, and tailoring products to a diverse employee demographic. The extent of investment and leadership commitment in the face of an externalised and aspirational value to be derived could be an obstacle but one that would outlast all investment and has the potential to diversify and create a more focused route to capturing the full opportunities in sectors within chosen markets.

Conclusion

Employee Value Banking emerges as a potent tool for not only advancing the financial wellness of employees, but also for supporting the sustainable growth of MSMEs in Ghana. As the nation strides toward a more inclusive economic future, the role of innovative financial solutions like EVB becomes increasingly pivotal.

Nabil is the Head, Employee Value Banking – Stanbic Bank Ghana

 

 

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