Banks ignore freelancers at their own peril

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Banks ignore freelancers at their own peril

Sunday, June 23, 2019 22:00

By ANTHONY MUGO |

The other day, I was chatting with the business development manager of a bank which was established to serve small and microenterprises as its main customers. I wanted to know if they recognise professional consultants as small entrepreneurs, the type whose work and workstations are so mobile that they operate from where their work takes them. She told me that, at least in her bank, only enterprises with brick and mortar “fixed abode” are recognised when it comes to provision of credit facilities.

I pressed further by asking her if such a consultant would be considered for a loan if they were to demonstrate on paper that they have consistently served reputable clients for a period of say two or more years. She was categorical that a history of professional service and current contracts cannot form the basis for the award of a loan. In the absence of an office, where tangible chattels could be used to secure the loan, freelancers are not eligible for loans.

It struck me that this category of entrepreneurs might be one that banks have been ignoring to their disadvantage. Expert freelance consultants, like individuals who are formally employed, constitute a significant pool of potential customers for banks and the size of the pool is growing. The client-consultant relationship has become significantly formalised in recent years to the extent that contracts between them are watertight enough to be recognised in courts of law.

In other words, the type of workers that some years back were referred to “briefcase consultants” is a dying breed. While today’s expert consultant might walk around with briefcases, or more commonly with backpacks slung over their shoulders, services that they offer are highly valued by an increasing variety and number of organisations including government ministries and agencies.

Alongside this evolution has been a significant increase in amounts of money that change hands between organisations and consultants. Many of these individuals may not necessarily have physical offices because their work does not require them to be rooted in one place. After all, technology makes it possible to contact them and track the progress of work on a 24-hour basis.

It is therefore surprising that most banks have not set up systems that would allow them to do business with this growing category of potential customers. As pressure for companies to focus on their core business has been mounting, more and more professional roles that range from IT support, data management and even recruitment, are being outsourced.

The reality is that not all companies have the capacity to outsource their services to large consulting firms with multiple departments. That is where individual consultants with expertise and extensive experience in their fields come in. As firms re-engineer and restructure in the face of changing technologies and work culture, many professionals are entering this consulting space and it may be time that banks took notice and created avenues to tap into that emerging customer base.

The writer is a development communication consultant.