Where does the money of any bank come from! Not a very difficult question and no it's not rhetorical. Banks are businesses at the end of the day, they raise funds first from investors, friends, family or fools. And once the guarantees are provided, the banks will start an IPO; people like you and I buy the shares, bonds, debentures and other types of commodities. Depending on what stage the bank is in, we can buy the share for a dirhams, and once the bank starts trading the price can go up or down in the stock exchange depending on how the general atmosphere is behaving.
When the bank starts trading it attracts people like you and I again to open accounts and deposit our money in that bank. The bank will also try all the marketing tricks to make us buy their products. So far so good. And so far it doesn't differ from a normal service provider. Trust is an issue, and the public will only believe in the service provider if they hear word of mouth about how great is the service provider and how fantastic is the service this service provider provides. I always recommended my bank to others, because I never lost my money since I started to have my account with them.
The great thing about banks is that the clients is loyal, as its so difficult to switch banks especially if the account details were printed on stationary and invoices. So for that reason, it's a life commitment, other service providers do not share this commitment and loyalty from its clients. We can change shops, change supermarkets, change airlines easily, it depends on what these services give us, otherwise we will not be loyal to them. Airlines now provided loyalty cards, others provided air miles but still, one would switch if there is a benefit to be gained. What I am trying to say here is that banks have secured their clients loyalty even if it doesn't provide the best services to him or her.
So the banks use our money to make (for itself) more money. And they grow dramatically because we are oblivious to one fact: the bank should look after the clients as well especially if they are SME's
Do they really look after the SME's?
Do they give low interest loans! Do they give facilities? Do they give finance for new projects with grace period? Do banks set on the board of SME's?do banks support SME's in as far as evaluating their new projects? Well I can Say with absolute certainty that none of this is provided to SME's. The banks wait until the SME become a large organisation on its own, and then it provides it finance! in actual fact banks do all the leg work for large corporations and provides them with all the capital that they need to start in a new location or a new country.
What do you think is the solution? You are welcome to give me some ideas as I have run out of them; the banks are a special breed and an aggressive one, no matter what you say or do they will never change their minds. The banks are always correct.