Philippines: Risk Rating Workshop Organised
As part of its advocacy campaign to promote "risk based" lending to small and medium enterprises (SMEs), the Small Business Guarantee and Finance Corporation (SBGFC) will conduct a series of workshops with rural banks and thrift banks on how to reorient their credit delivery systems from being collateral risk-based.
From August 24 to 26, SBGFC will host a workshop for Mindanao-based rural banks at the We R Inn Hotel on J.P. Laurel Avenue, Davao City.
Rural banks located in the Visayas area will have their "Risk Rating Workshop" on August 29 to 31, at the Cebu Business Hotel, Cebu City.
"Risk-based" banking, as opposed to "collateral-oriented" lending, means that banks assess the credit worthiness of SME borrowers not mainly on their capacity to put up collateral but also on their ability to comply with the four (4) basic factors that ensure business success, namely: managerial capability, re-payment capacity, production capacity and prevailing market conditions.
Using the "scoreboard method," rural banks can measure the viability of their prospective SME borrowers by analyzing and computing their capability to meet the minimum criteria based on the "four-way test."
During the three-day workshop, Jaouad Berrada, an international banking expert and technical consultant at the Asian Development Bank (ADB), will present to rural bankers a step-by-step guide on how to establish their own "risk rating scoreboards" while Luna David, financing delivery sector head of the Small Business Corporation, will brief them on the new product innovations and latest developments in SME financing.
Ignacio Alvizo, Mindanao Microfinance Council (MMC) chair and president of Enterprise Bank, will deliver the welcoming remarks. MMC is the largest aggrupation of rural banks in Mindanao.
Around 90 rural bankers have already confirmed to attend the two pilot-workshops scheduled in the cities of Cebu and Davao this month, according to Victor Hernandez, SBGFC-Regional Operations Group head.
He also said that they will be conducting several more workshops for rural and thrift banks in the future.
The workshops, he said, are part of the corporation's mandate to help its conduit bank-partners improve their capacities in facilitating credit access to SMEs.
The Risk Rating Workshop is also part of the corporation's ongoing advocacy campaign to wean local banks away from collateral-based lending.
The SBGFC is an attached agency of the Department of Trade and Industry.
Source: Sun.Star Davao
