THINK CAREFULLY BEFORE BANKING WITH FNB – WHEN WILL SMEs BE RECOGNISED?

THINK CAREFULLY BEFORE BANKING WITH FNB OR OPENING YOUR BUSINESS ACCOUNT WITH FNB — YOU MAY FIND THAT YOUR YEARS OF GROWTH, LOYALTY AND FINANCIAL DISCIPLINE ARE NOT RECOGNISED 19+ years with FNB. More than R7.5 million annual business turnover through the bank. Substantial cash reserves. Approximately 19 years without missing a bond payment. FNB confirms affordability is not the problem — yet further lending is stopped because of one disputed R3,680 MTN account.

I am writing this review not simply because I am unhappy about a home-loan application.

I am writing it because I believe South African entrepreneurs and small-to-medium business owners need to think very carefully about what their banking relationship will actually mean when the time eventually comes to grow.

FNB asks:

“How can we help you?”

After more than 19 years, I am now asking FNB:

When will a growing South African entrepreneur ever be big enough for you to recognise?

I operate businesses in the environmental-health sector, including environmental consulting, indoor air quality, mould detection and remediation, dampness investigation and healthier indoor environments.

These are growing businesses.

My business turnover through FNB is currently in excess of R7.5 million per annum.

I have maintained substantial cash reserves with FNB, including balances of R700,000-plus over extended periods during the last three years.

Substantial environmental consulting income also flows through my personal FNB account.

FNB can see my personal banking activity.

FNB can see my business activity.

FNB can see my cash reserves.

FNB can see my professional consulting income.

FNB can see my investments.

FNB can see my credit-card conduct.

And most importantly:

FNB can see approximately 19 years of uninterrupted payments on my home loan.

I have not built this financial position overnight.

I have built my businesses over many years through work, financial discipline, reinvestment and taking my own commercial risks.

And the uncomfortable truth is that FNB did not finance that growth.

I did.

For approximately 19 years I have repeatedly financed the growth of my businesses from my own earnings, cash savings and retained reserves.

When vehicles were required and FNB/WesBank did not provide the solution I required, I financed vehicles through other institutions.

When my businesses required capital, I funded them.

When opportunities arose, I invested my own money.

And now, when I approached FNB to release approximately R500,000 against my existing home loan to assist with the next stage of expansion, I expected that nearly two decades of actual financial conduct with the bank would count for something.

Instead, my application was declined.

Initially, I was told that the reason was:

“misconduct of accounts and scoring.”

Imagine receiving that description after approximately 19 years of servicing the same bank's bond without missing a payment.

I challenged it.

FNB investigated further.

And eventually the real position was confirmed to me in writing.

FNB told me:

“Affordability is not an issue.”

FNB also confirmed that:

There are no other adverse listings or overdue amounts on my payment profile.

So what is stopping the application?

A single MTN telecommunications account.

The amount?

R3,680.

The account is disputed.

This is not R3,680 that I was financially unable to pay.

I dispute whether MTN is entitled to that money.

The MTN relationship dates back to approximately 2007. The original contractual period expired many years ago. The account continued thereafter, I ultimately gave notice when the service was no longer required, and MTN continued billing. I dispute those subsequent charges and have told MTN that if it believes the amount is legally due, it should pursue the appropriate process.

That dispute is being dealt with separately.

But FNB has now confirmed that this R3,680 disputed telecommunications entry is sufficient to stop the lending application.

Let that sink in.

R3,680 apparently outweighs:

Approximately 19 years without missing a bond payment.

More than R7.5 million annual business turnover through FNB.

Substantial cash reserves.

My personal professional consulting income.

My actual credit-card conduct.

My transactional history.

My investments.

Years of business growth.

And FNB's own confirmation that:

AFFORDABILITY IS NOT THE ISSUE. So when exactly will I be big enough for FNB?

Must my turnover reach R10 million?

R20 million?

R50 million?

How many millions must flow through FNB before my history becomes relevant?

How much cash must I keep in the bank?

Must I pay my bond for 25 years instead of 19?

How many businesses must I build?

How many times must I finance my own expansion?

At what point does FNB stop looking for the profile of a conventional wage earner and begin recognising an entrepreneur, professional practitioner and owner-manager who actually generates, manages and reinvests his own income?

That is the part of this experience I find most disturbing.

My financial structure does not resemble that of an ordinary salaried employee.

I earn professional environmental consulting fees.

Those fees flow through my personal account.

I pay teams and the expenses associated with delivering those services.

The remaining funds are available to me.

I meet my obligations.

I invest substantial portions of the surplus.

I use those savings to build businesses.

That is entrepreneurship.

Yet after nearly two decades with FNB, I find myself questioning whether the bank actually understands the type of customer it claims to serve through Private Banking.

What is FNB Private Banking actually for?

I believed Private Banking meant that somebody understood the customer behind the account number.

That the banker understood his businesses.

His history.

His financial behaviour.

His income structure.

His assets.

His ambitions.

And that when an automated or rigid credit process produced an outcome that did not make commercial sense, there would be sufficient relationship knowledge within the bank to understand the actual customer.

My experience has left me questioning that completely.

Why am I paying for a Private Banking relationship if, when I actually need my bank to understand my financial position, the relationship provides no meaningful advantage? The FNB people involved

I am naming the FNB representatives involved because this matter has moved through several levels of FNB and the public should understand how the position developed.

Bernice Ryan — FNB Home & Structured Lending Solutions / Home Loans Sales

Bernice communicated the decline and advised me that the application had been declined due to:

“misconduct of accounts and scoring.”

Calvin Wayne Smith — FNB Private Banking

Calvin subsequently investigated matters further with Credit.

He confirmed to me in writing:

“Affordability is not an issue.”

He also confirmed that there were no other listings or overdue amounts on my payment profile, and identified the disputed R3,680 MTN listing as the issue preventing the application from proceeding.

Diren Jugmohan — FNB Regional Manager

Diren became involved after I escalated my dissatisfaction with FNB's repeated inability to assist with funding despite the extent of my personal and business banking relationship.

I retain the correspondence supporting these statements.

I am therefore not speculating about FNB's reasoning.

I am reporting what FNB itself has communicated to me.

I have now made my own credit decision about FNB.

If FNB regards me as sufficiently uncreditworthy that a disputed R3,680 telecommunications account outweighs approximately 19 years of demonstrated repayment conduct, I see no reason for FNB to continue extending revolving credit facilities to me.

I have therefore instructed FNB to close my credit-card facilities.

Not because I cannot afford them.

Not because they are delinquent.

Not because I cannot make the payments.

Quite the opposite.

FNB itself has confirmed that affordability is not the issue.

I simply find it contradictory for a bank to continue providing me with revolving credit while simultaneously regarding me as unacceptable for further lending because of this disputed R3,680 matter.

I am also seriously reconsidering the value of continuing with FNB Private Banking.

And I no longer require this expansion funding from FNB.

Why?

Because I have already done what I have had to do for approximately 19 years.

I have started financing the expansion myself from my own cash savings.

Again.

The expansion is proceeding.

The businesses will continue growing.

But that growth is not occurring because FNB financed it.

It is occurring despite FNB not financing it.

That distinction matters.

This is bigger than my own application

This type of decision-making potentially affects thousands — perhaps many thousands — of South African entrepreneurs and SME owners.

South Africa constantly speaks about:

SME development.

Entrepreneurship.

Economic growth.

Innovation.

Employment.

But SMEs do not grow because politicians, banks and large corporations use those words in speeches.

Businesses grow because entrepreneurs take risks.

They work.

They employ people.

They develop services.

They buy equipment.

They invest.

They reinvest.

They put their own savings on the line.

And at certain points they need access to capital to accelerate that growth.

What happens when the banking system does not understand those entrepreneurs?

What happens to the business owner who does not receive a neat salary on the 25th of every month?

What happens to the professional practitioner whose earnings fluctuate because he invoices clients?

What happens to the owner who deliberately retains and reinvests cash instead of consuming it?

What happens when years of actual financial behaviour count for less than a rigid scoring outcome?

Those are questions that the South African SME community should be asking.

My businesses serve the health sector

This makes my experience particularly frustrating.

My businesses operate in the environmental-health field.

We deal with indoor air quality, mould, dampness, environmental contamination, remediation and healthier indoor environments.

I am developing and expanding businesses providing services and products that can directly affect people's homes, workplaces and health.

The market opportunity exists.

The businesses are growing.

I am prepared to invest.

And I am investing — with my own money.

Again.

After approximately 19 years.

Think carefully before choosing where to bank your business

My message to South African entrepreneurs considering FNB is therefore simple:

Think carefully before opening your personal or business banking relationship with FNB.

Do not simply ask what benefits the bank offers you today.

Ask a much more important question:

What will this relationship actually be worth when my business has grown and I eventually need my bank to understand and support the next stage?

Do not assume that years of loyalty will automatically matter.

Do not assume that millions of rand flowing through the bank will automatically matter.

Do not assume that maintaining substantial cash reserves will automatically matter.

Do not assume that nearly two decades of servicing the bank's own loan will automatically matter.

My experience tells me otherwise.

The South African public deserves to know

I believe this experience deserves scrutiny beyond HelloPeter.

It deserves the attention of FNB senior management, the South African business community, SME organisations, financial and business media, the Department of Small Business Development, the Minister of Finance, economic representatives of political parties and civil-society organisations interested in entrepreneurship and economic growth.

Because this is no longer about whether FNB approves my application.

I have already financed the expansion myself.

The larger question is:

How many South African entrepreneurs are building successful businesses despite their banks rather than because of them?

And for FNB specifically:

WHEN WILL WE BE BIG ENOUGH FOR YOU TO RECOGNISE US?

FNB asks:

“How can we help you?”

After more than 19 years, my experience has produced a very simple answer:

YOU DID NOT FINANCE MY GROWTH. I DID.

And when I approached you to help finance the next stage:

I HAD TO DO IT MYSELF AGAIN.