Giving relevant advice to small business owners : The crucial role of local savings banks

The support offered to small and medium sized enterprises (SMEs) comes in a variety of forms and has been at the core of small business studies during recent decades. Most of these studies have concentrated on development of best practices and the evaluation of governmental initiatives, which have increasingly focused on the use of different intermediaries as advisors for SMEs. Banks have rarely been discussed as sources of advice even though they have been found to be one of the most common sources of advice for SMEs. This study highlights the main variables leading to customer satisfaction regarding the advice provided by banks. By using a standardised survey, we study the relations of banks and SMEs based on three differentiating qualities of advice. These variables include the capability of the advisor in terms of understanding the specific needs of the SME, the commitment of the advisor to the relationship, and the use of non-standardized approaches in the interactions with the firm. By using these qualities banks are able to differentiate themselves from competitors and deepen the relationship between banks and SMEs. The hypotheses of the study were tested on a sample of 145 Swedish SMEs