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SME BANKING – DEVELOPMENT AND MANAGEMENT

Course Overview

Developing a successful SME banking business is always difficult because of lack of reliable market information and the difficulty of building a sound loan portfolio. It therefore requires banks to adopt novel approaches to overcome unexpected challenges they face. Key challenges come from poor quality data, ill-suited organisational structure, higher default rates, low interest income, unfamiliarity of managers with the culture of SME banking and strong competition.

This is programme is developed to provide pragmatic solutions to the problems facing banks and help them build strong and profitable SME banking business. It draws on our knowledge and practical experience of working with banks and financial institutions. Participants will therefore learn the application of key principles of successful SME banking and be able to adopt the action plans for their own institutions.

TARGET GROUP

  • SME Managers
  • Branch Managers
  • Departmental Heads
  • Relationship Managers

LEARNING OUTCOME

At the of the programme, participants will be able to;

  • Outline the SME market and evaluate its attractiveness within their context
  • Initiate SME products/services that customers really need
  • Introduce innovative products and “product bundles”
  • Manage the “cost to serve” problem
  • Overcome the perceived risks of SME banking
  • Deliver products to the market in the most efficient way
  • Apply appropriate lending techniques to the market
  • Increase cross-selling rate and the “share of wallet” of your bank
  • Improve the credit decision process
  • Implement effective risk limit for the banks
  • Be aware of how asset-based and structured financing can mitigate SME risk

COURSE OUTLINE

DAY 1
SME banking approach and commitment

  • SME Banking model choices
  • Getting SME banking right – understanding trends
  • Pursuing SME-driven revenue growth
  • Constraints, competition and profitability
  • Rebuilding relationships with SME’s through client-centric approach
  • Implementing an SME strategy and managing growth

Insight into the SME market

  • Market Overview – SME  
  • Customer characteristics – clear definition of your customers
  • The difference between SME and Retail Banking
  • Market segmentation – aim for leadership in the chosen market
  • Determining Relevant characteristics
  • Understanding the structural barriers in the marketplace
  • Benchmarking the competition – challenges and opportunities
  • Maximising the “share of wallet”

 

DAY 2
Building competitive product range

  • Profiling SME customers’ real needs and wants
  • Developing appropriate and innovative financial services
  • Product range – respond to needs – keeping pace with changing needs
  • Defining core SME products
  • SME Product development process – ‘quick to market’
  • Aiming for total relationship profitability

Marketing of SME Products

  • Characteristics of SME products and why selling is difficult
  • Understanding the process of selling to SME’s
  • SME’s attitude and behaviour towards banks
  • Effective brand strategies – branding, pricing, distribution
  • Differentiating your value propositions

DAY 3
A streamlined credit decision process for SME customers

  • Defining appropriate approval levels for SME lending
  • Credit Risk Management policies and Procedures
  • Different approaches to lending to SME’s
  • Ten commandments of lending to SME’s and why they cannot be broken
  • The role of collateral in the lending decision
  • Lending to the future using historical information

Risk Management

  • Risk-based pricing – factors influencing pricing
  • Applying risk mitigating factors to SME Portfolio
  • Keeping Relationship Managers on the road – client monitoring
  • Even balance sheet growth – aim for deposit growth as well

 

Portfolio Management

  • Building a well-balanced portfolio – Nurturing and supporting growing SME’s
  • Improving debt management – Managing non-performing loans
  • Adopting effective client relationship management practices