Credit Analysis & Financial Evaluation of SMEs (Level II, Certification Program on SME Banking)

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Credit Analysis and Financial Evaluation of SMEs (Level II, Certification Program on SME Banking)
March 3-14, 2014 – Manila, Philippines

RATIONALE:
Loan financing is paramount for financing initial investment and working capital of SME. Many developing countries would not be able to implement SME projects without access to loans from development banks,other development financing institutions and even commercial banks. This situation makes good credit a very important instrument in SME investments. Banks and other financing institutions will examine the credit of investors before it makes loan funds available. Even suppliers who will provide assets on credit will examine the credit of investors. The conditions of loan as to interest rates and repayment schedules depend on credit evaluation. It is therefore important for investors to know the process of credit analysis and how lenders evaluate the risks associated with loan financing.
This course consists of two modules. Module 1 will discuss important concepts, formats and procedures for developing the “financials” of start-up SMEs including incubation and rehabilitation. Module 2 will discuss other important concepts in managing and sustaining SME as a business enterprise.
This 2-week course is Level 2 in the SME Credentialling Program. It is relevant for officials from SME banks, development banks, nonbank development institutions in the government and NGOs, and commercial banks who are directly and indirectly involved in SME programs.

TOPICS INCLUDED:
Module 1
The nature of credit; start of credit investigation
Areas of credit analysis for investment loans including SME
Cash flow analysis; income Statement; balance sheet; management of the SME
SME position in the industry and the future of the industry itself
Investment climate in the country where the SME operates:
International conditions affecting the SME and the industry for export oriented SME
Loan Security: Asset-Based Collateral Approach; Other Asset Collateral Approach; Performance – Based Approach
Identifying business risks
Guidelines for credit analysis for investment loans
Use of financial ratios for credit analysis
Financial analysis for start-up SME
Financial management system for SME (budgeting, accounting, auditing)
Proforma income statement and proforma cash flow
Determining loan repayments (grace period and interest moratorium)

Module 2:

Rendering technical assistance to SME investor
Characteristics of a sustainable enterprise
Sustainable management action model
Important concepts in management
Decision Making for SME investors
Essentials of marketing and determining marketing channels
New product development process

METHODOLOGY
The course will be discussed on the point of view of officials of development financing institution who are developing/and or managing SME financing programs who are expected to render technical assistance to their SME clients. It will utilize a combination of seminars and workshops. The seminars will consist of short lectures, demonstrations, and examples. The workshops will involve short case studies and computation exercises. The participants will be working on their assignments using computers. The participants will be encouraged to read the handouts before coming to class.

DURATION & VENUE: 2 weeks from March 3-14, 2014; Manila, Philippines
For inquiries, please call the ADFIAP Secretariat, telephone number +63 2 8161672; +62 2 8435892; Email: inquiries@adfiap.org; visit us online: www.adfiap.org.

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