Cases

Assessing Market Potential for the Business Financial Division of a Multinational Bank in India

Background and Challenge

The client wanted to accelerate the growth of its Business Financial Services (BFS) division as part of its worldwide emphasis on SMEs in select economies. UC had helped at setting up the division previously. Top management wanted to study and analyse the opportunity for this division, to understand the level of resource deployment. Top management wanted to understand the market with respect to the following factors

  • Number of SMEs in sectors
  • Geographic clusters of SMEs in target sectors
  • Ownership type
  • Market size for preferred banking products and services targeted at SMEs

Approach and Recommendations

To assess market potential, UC adopted the following approach:

  • Defined 192 industry segments in manufacturing, services, trading and retail sectors

    1) Short listed the target sectors based on the following filters

    First Level: Sales growth pattern, profit/ loss pool, risk profile

    Second Level: Age of industry, location, liquidity, predictability, nature of collateral

    Market Economics: Asset base, capital structure

    2) Short listed 53 industries for finding market size

  • Defined the market size for SME banking products and services for all short listed industry segments based on

    1) Turnover bands

    2) Ownership type (Public, Private, Partnership & Proprietorship)

    3) Top 40 cities

  • Type of banking product (Short term debt, Long term debt)

Results

The client received an understanding of the market landscape of the SME sector across industries along with a shortlist of important industries to focus on.