SME Credit Risk Management Training
SME Credit Risk Management Training is a professional executive training program. It is designed with specific focused on SME lending environment in UAE. It would enhance your ability to take effective and calculated lending decisions in today’s complex business environment.
The program combines the highest standards of academic knowledge with a practical hand on approach to lending decision making. This is a professionally rich program designed to take your credit risk knowledge to the next level and deepen your financial analysis and risk management skill base. The certificate program comprises of various modules of training in the areas of SME Lending Environment, assessing credit risk, financial analysis, credit approval process, early warning signals and handling of non-performing loan portfolio.
Key Take Away
- Distinguish how the assessment of SMEs differs from large corporates.
- Assess risks and mitigates in an SME business.
- Focus on the criteria in conducting due diligence on SME loan applications.
- Interview SME loan applicants & clients for necessary information.
- Carry out credit analysis thoroughly and prudently.
- Properly monitor existing SME loans/clients, for “red flags”
UAE SME Lending Environment
- SME banking products in UAE & their risks
- Lending practices in UAE
- Internal credit rating
- Understanding the SME business model
- Application of credit principles while approving the credit
Financial Analysis – Lenders View
- A lenders’ view of profitability, liquidity, solvency & debt coverage
- Cash is king – how SMEs manage it
- Drill down question to be asked doing financial analysis of SMEs
- Detailed financial analysis & projections techniques
- Financial Ratios for SME Credit – Calculations of Ratio in Detail
- Implications of Financial Statements on SME Credit
Specialized Credit Analysis
- Industry specific credit approval terms
- Specialized credit analysis for
- Contracting & Trading
- Cross border financing
Credit Approval & Post Approval
- Credit risk analysis and approval techniques
- Focal points in credit review process
- Post approval conditions
- Early warning signals
- Restructuring of problem loans
Why lend to SMEs ?
- SME, contribution to growth
- SIAEs have very significant credit needs
- Risk/reward equation out of kilter In retail market
- Segregation of professional and commercial transactions
- Minimal operational and financial reporting
- Limited access to capital
- Lack of sustainable competitive advantage
- Lack of collateral & mentoring
SME Finance – How Lender Deal With Them!
- Assessment of character
- Careful analysis and covenanting for separation of business
- Support and covenanting
- Gearing covenants and forward planning
- Due diligence checklist and monitoring
What SMEs Expect From Lenders
- Appropriate product for the borrowers
- Check with them before taking action.
- Absolute ethical behavior
- Fair pricing
- Bankers to ring and ask questions
Analyzing The SME Business Model
- What are the profit drivers for the business?
- What target market do the business serve?
- What is the value proposition of the business?
- What are the operation advantages of the Co?
- Co’s relationship with its suppliers
- Expansion plans – medium and long term
5 C’s of Credit – To Discussed in Detail
- Key Concept and practical examples
- Uses for Project Finance and Scenario Analysis
- Project Phases
- Operation Phase
- Project Cash Flow Statement
- Key Risk in Project Financing
- Performance Risk
- Payment Risk
- Cash Conversion Cycle
Projections & Forecasting
- Tools for Projecting Financial Statements
- Projected Income Statements
- Determine Sales Growth & Contraction
- Projection of Assets & Liabilities
- Future Financing Need & Cash Surplus
- Credit Application & Risk Based Pricing
- Non-Financial Warning Signals
Finally! The Credit Proposal crucial for SME Credit Risk Management Training
- Key Areas to be considered
- Adequacy of collateral or a loan without collateral
- Detail Description of Collateral Issues – Opportunities & Threats
- Annexures & Attachments to the Credit Proposal
- Settlement Issues – 5 Key Points
- Restructuring of Credit Limits