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Requirements for SME Lending

Requirements for SME Lending. Where is BRR in the SME Lending Process?. Requirements for SME Lending. 1. SME Lending Policies and Guidelines 2. Credit Process which includes - Credit Initiation/ including BRR - Credit Appraisal - Approval Process

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Requirements for SME Lending

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  1. Requirements for SME Lending Where is BRR in the SME Lending Process?

  2. Requirements for SME Lending 1. SME Lending Policies and Guidelines 2. Credit Process which includes - Credit Initiation/ including BRR - Credit Appraisal - Approval Process - Loan Implementation - Monitoring - Account Management (including Remedial Management) 3. Credit Manual 4. SME Staff Training 5. Organization

  3. Contents of SME Policies & Guidelines • Rationale/Vision of the bank • What are the eligible projects • What are the projects not eligible for financing • Amount of loan for financing • Term of the loan • Interest on the loan • Areas of operation

  4. Policies and Guidelines (con’t) • Basic requirements required from borrowers • Acceptable collaterals • Bases of approval (result of CI/BI, repayment capacity of SME, min. acceptable BRR) • Authorities of loan approval • General implementation guidelines • Monitoring/supervision policies

  5. Logistical Requirements • Survey of the area • Marketing paraphernalia – flyers, brochures of product offerings, calling cards • Forms (survey form, call report, interview form, application form, loan approval/recommendation, project visit/monitoring form • A place in the office for SME clients • Dedicated staff trained for SME lending • Transportation

  6. Tips • For banks with a HO and several branches, the key is consistent application of policies, forms and use of systems. • For consistency, for comparability, and for fair performance evaluation of officers and staff.

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