INTRODUCTION
MEs complain that lack of access to finance constrains their growth and competitiveness. Indeed, financial sector policies often work against the ability of commercial financial institutions to serve MEs, albeit often unintentionally. In many countries, lack of competition in the banking sector limits pressure on banks to reach out to ME client segments. High risk and high transaction costs—real or perceived—associated with bank lending to MEs likewise constrain access. Often, supervisory and capital adequacy requirements penalize banks for lending to enterprises that lack traditional collateral.
Would-be ME borrowers often have no financial track record and are unable to provide reliable information, while banks lack the appropriate instruments for managing risk and face difficulties in enforcing contracts because of inadequate legal frameworks and inefficient court systems. Most important, banks typically lack the know-how to reach the ME market segment.
This course provides participants with a solid foundation of skills that helps them reach sound, reliable judgments of company creditworthiness. Applying a structured framework, delegates will be able to identify and assess key qualitative and quantitative factors in determining credit risk.
