A Letter from the Trenches: What I Wish Banks Knew About SMEs

Today, as the world pauses to mark World SME Day, a day championed by the United Nations to recognize the pivotal role that small and medium-sized enterprises play in economic growth, job creation, and community development, I find myself reflecting on the realities of being a small business owner in Kenya.

In the glossy reports, SMEs are dubbed “the backbone of the economy,” a phrase repeated so often it borders on cliché. Yet for many of us in the trenches of enterprise, whether we run a hardware store in Nakuru, a bakery in Kakamega, or a digital startup in Nairobi, that recognition feels like a pat on the back without the real support we so desperately need.

So, if I could pull aside every bank executive and policy maker for a coffee, I would lecture them the way one lectures a school kid who has difficulties in hearing hard truths on what I wish they knew and understood about us, SMEs.

I will let them know that we are not just loan applicants; we are dreamers, builders, and employers.

Behind every SME is a story. A woman who left formal employment to open a tailoring shop. A young graduate who built a logistics app with friends. A retired teacher is now running a poultry farm. These are not just “borrowers.” We are individuals pouring our souls into ventures that support families, educate children, and breathe life into local economies.

But when we walk into a bank, often we are greeted with cold checklists, jargon-filled documentation, and risk profiling that views us more as potential defaulters than potential partners. We are treated like suspects when we walk into a bank.

Read Also: As Long As the Kenyan Government Competes With SMEs For Credit, They Will Always Lose

I will put my cup of coffee down, breathe in, out, and then, like a preacher on the pulpit, tell them that as SMEs, we don’t need handouts; we need flexible, accessible finance.

Many of us are not looking for free money. We understand risk. We understand the return. But we need financial products that understand our rhythm. Our revenue cycles don’t always align with 30-day repayment calendars. Our collateral doesn’t sit in neat land title deeds. Our credit history might be murky, not because we’re irresponsible, but because we’re informal and trying our best to formalize.

Banks need to move beyond the one-size-fits-all financing model. They need to co-create lending products with SMEs, products that consider seasonality, sector-specific challenges, and alternative credit scoring mechanisms. Imagine a loan product tailored for a boda boda repair shop that sees peak business during rainy seasons. That’s the kind of innovation we crave.

I will ask the executives in suits as they sip the coffee I have paid for using my money, whether they know that our greatest needs aren’t always capital, but capacity.

I wish more banks knew that throwing money at SMEs without equipping them is like handing someone the keys to a bus without teaching them to drive. What most of us need is mentorship, business advice, digital tools, and financial literacy. We need someone to walk with us, not just wire money to us.

The best bank relationships I’ve seen involve more than money. They involve workshops on cash flow management. Masterclasses on digital marketing. Networking forums where we meet fellow entrepreneurs. Banks need to move from being just lenders to becoming growth partners.

I will tell them that we, as SMEs, are informal and are not invisible.

In Kenya, a large number of SMEs operate informally. They may not be registered companies with audited accounts, but they are economic powerhouses in their own right. Think of Mama Mbogas, local welders, and freelance creatives. These businesses may not have a KRA PIN or a business certificate, but they generate income, employ staff, and pay rent.

Banks need to learn how to serve this group meaningfully, not by forcing them to conform to rigid systems, but by designing pathways for them to gradually formalize, without fear of punitive consequences.

I will ask them whether they know, apart from what they read in Wall Street journals, that for SMEs, technology is not a luxury, it’s a lifeline.

In today’s world, SMEs that don’t go digital are left behind. But many small businesses don’t know where to start — and that’s where banks can play a crucial role. Partnering with fintechs and offering digital payment platforms, inventory tools, and e-commerce onboarding can make it easier for SMEs to transition into the digital economy. It’s not just about giving us an app; it’s about showing us how to use it to grow.

Anyway, I have ranted enough. But amidst my ranting, on this World SME Day, it would be remiss not to mention an institution that’s walking the talk. NCBA Bank has recognized that SME support is not a one-time intervention, but a continuous relationship. Through its dedicated SME programs, NCBA is providing tailored banking solutions, access to sector-specific mentorship, and most importantly, capacity-building programs that help business owners understand financial management, strategic planning, and digital adoption.

When I was setting up my small water company, I walked into many banking halls. Many looked at my proposals and dismissed them, saying it was not viable. I am sure I could hear most of them laughing after I left their presence. “There are so many water companies, so cheap that a bottle is sold at 10 shillings on the street. Where will you sell yours?” Some would ask. But NCBA came through.

So, on this day of global reflection and celebration, my hope is that more banks will follow suit. That more financial institutions will move beyond boardroom slogans and into the muddy waters of real SME support. That they will stop asking, “How risky are you?” and start asking, “How can we help you rise?”

Because when SMEs rise, economies don’t just grow; they thrive.

Read Also: NCBA: The People’s Bank—East Africa’s Financial Powerhouse For SMEs, Creators, And Visionaries