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Morris Mpala, MoB Capital
FINANCIAL institutions are really letting business down. By financial institutions we mean any institution that provides funding one way or the other in whatever format that may be and this includes NGOs.

The lack of confidence one experiences with some medical practitioners is also happening with business towards financial institutions in the diagnosis, prescriptions as well as care doesn’t seem to exist at all.

Some have even gone to describe finance houses as people that lend you an umbrella when it’s not raining but magically take it away when it starts pouring down.

One wonders where this confusion is coming from. Traditionally finance houses are supposed to offer solutions to business. In this regard business has to go to these institutions and be offered solutions as it is their mandate to do that.

There is need to emphasise that at times closing down businesses is a financial solution as divesting allows maximum utilisation of resources financial or otherwise. Unfortunately the opposite is happening.

There is the current trend where businesses try to diagnose their own challenges and present them to financial institutions as solutions for further panel beating, which is a very precarious situation because of inherent inefficient of the system that will be trying to get solutions.

Businesses are there to make money and financial institutions exist to guide them and offer solutions to their day to day challenges.

Business is the scenario that finance houses are supposed to come in and diagnose and then offer relevant remedy or no remedy at all when all else is healthy.

The current scenario where finance houses thinking offering finance/funding is a solution is the reason why businesses are struggling.

They would not grow and compete globally against stiff outside forces as funding is but one of the financial solutions to be administered to business among other remedies    to sustain their operations. Gone are the days when finance houses will identify, nurture and offer solutions to businesses in the hope of creating a win-win approach.

All these institutions are chasing is instant glory. With some this approach has led them to have less quality clientele as it’s always tit-for-tat for both finance house and business entities.

Back to basics financial solution involves indentifying gaps in businesses, grooming businesses, nurturing from start, proactive solutions provision and relevant financial solution packages that are unique to each business.

Above all offer relevant funding in terms of quantity, period, cost and timing at all times. Those that have managed to cultivate this in their portfolio have gone to be finance houses of preference and have managed to weather the mother of storms possible due to customer loyalty cemented by that. There is need for finance houses to invest more into research and development to serve better the needs of businesses in the communities of their sphere of influence. The “you’ll not have to queue” cliche is so tired and so yesteryear that it is now meaningless.

Everyone doesn’t want to queue. Pure vanilla business transactions would not do under these circumstances because these are extraordinary times.

Therefore, the need to keep abreast with business, interests, wants, needs, aspirations can never be over emphasised.

It’s INNOVATE OR DIE. The minimum standards that are now required for finance houses to compete for business have been raised and only those that attract the cream will sustain their operations the rest will fold or will do mergers and lose their identities in the process.

Talking of dying, did you notice how banks screamed over the introduction of money transfer facility platforms?

Banks should have pioneered it but ICT firms beat them. This is typical of the Zimbabwean landscape where lack of research and development (R&D) has led to no innovations or merely tired or parroted products/services being forced down the respective consumers and once consumers find an alternative its spells doom to those offering that service/product. Fiancés houses mistake usual for normal. There is no one size fits all for financial solutions.

Each business has a tailor made solution unique to it but only if there is R&D can you identify the gaps in a business otherwise tired and irrelevant solutions to business will remain just that: tired and not real time solutions.

It’s ‘ we have always done it like that way syndrome’ (even though it would be the wrong way), which has seen the finance houses not being so relevant to business challenges coupled with greed as opposed to gradual growth of profits from these institutions.

Everyone wants to make money and more of it because it is a confidence booster but the how to make more is the major challenge to many establishments, which is a gap finance houses have to aid and perpetuate through proactive engagement and handson approach     and then they will be in a position to make more profits because their mandate is to make money not charity.

The passive approach to business management by finance houses will not help now nor in the future. Instead that could lead to businesses that are flashes, that is, here today dead tomorrow and politicians’ hullabaloos would not help either as its purely economical not political.

It is a financial problem that needs a financial solution not a political problem for politicians.

The sooner businesses understand this the better for everyone in this value chain.

Even the funds advanced to these firms, which are not being nurtured accordingly will be just  money under the drain as it goes to support liabilities instead of creating cash generating assets to sustain business. The owners don’t see it as a problem but lack of knowledge, which financial houses should impart to these businesses until they are fully enlightened in business management.

The Silicon Valley in the United States was borne out of sheer shrewdness by financiers and now the world is so much indebted to this principle of proactive business nurturing.

Cash is not the only prescription as our case in Zimbabwe. Finance houses should be able to identify raw talent, nurture it, fund it and let it grow to dizzy heights.

Mark Zuckerberg of Facebook couldn’t be where he is now if it wasn’t for venture capitalists that took a risk with a very geeky troublesome college dropout kid and turned him into the youngest billionaire from just his passion of IT.

A lot of businesses have been borne out of this similar way of pro-activeness. Talent is money and if finance houses took time to identify and invest.

Imagine if Facebook was allowed to grow on its own it would have folded before making such an impact because of lack of mentorship in all aspects of business management.

Econet as well offers an example of good approach of support structures by finance houses and now they are the big boys and are contributing in their little way to nurturing people of all walks of life with extensive R&D on products and services.

The brain drain has not helped this cause as both those that are supposed to be solution givers and receivers are bleeding from human capital resource to harness all aspects of business management and crucial development.

Finance houses should encourage entrepreneurship as opposed to encouraging business people.

Business people don’t empower .Entrepreneurship is dreaming big and running successful business that create employment.

More resources need to be channeled into training, R&D, mentorship, value addition, empowering, leadership skilling as this will go along way to alleviate challenges faced by the current status quo.

Information is power, invest in R & D.