Category: Risk Management
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Experience, the Success Factor for SME Lending
Providing loans to Small and Medium Sized Enterprises (SMEs) is among the most challenging business segments for financial institutions and investment funds. This is true for both developed and developing markets. Analysts often complain that the available financial information is incomplete or outdated. Loans require significant collateral. At the same time, SME entrepreneurs face significant…
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Quantifying Qualitative Information in SME Lending
A major challenge in the risk assessment of SME borrowers is the largely unstructured and of qualitative nature of information. Financial Institutions find it difficult to approach the assessment this information which often includes only rudimentary and un-audited financial statements. Mass market retail loans are easier to evaluate because of the larger share of quantifiable…