Building a Vibrant SME Lending Industry
Banking support for small- and medium-scale enterprises – a key developmental input; the role loan guarantees can play in brokering SME finance
Panel Participants
- Moderator: Christian Hougen, Director, Office of Economic Growth and Agriculture, USAID/Iraq
- Wadie Noori Al-Handhal, Chairman, Ashur International Bank and Chairman, Iraqi Company for Bank Guarantees, Ltd.
- Dr. Ahmed Attiga, Senior Country Officer, International Finance Corporation (IFC)
- Chris August, Banking and Commerce Advisor, Basra Provincial Reconstruction Team
- Mohammad Said Hamami, Managing Director, Jordanian Loan Guarantee Corporation
Topics Discussed
- SMEs as an engine of development. Job creation and allocation of resources to the most productive sectors of the economy by opening up the credit markets to creditworthy enterprises that lack physical collateral
- Replacing a collateral-based lending approach with a cash-flow-based approach.
- The need for training in credit analysis
- Replacement of a lending protocol with a diffuse responsibility structure by one using the Credit Officer concept
- Emphasizing bank profitability (pricing and repayments) as well as meeting portfolio development goals
- Emphasis on the productive and service sectors
- The Role of the Iraq Company for Bank Guarantees in brokering / fostering an SME lending industry in Iraq
- Providing the protection of collateral yet not guaranteeing 100% of loan principal and interest
- Requiring banks to conduct thorough credit analyses
- Demonstrating to banks that cash-flow-based lending can yield very high repayment rates
- The Jordan experience
Reference Works
August, Chris. “SME Lending”. April 2007.
Garjis, Hikmat. Letter to IZDIHAR Chief of Party from Hikmat Garjis, CEO of Iraqi Middle East Investment Bank, regarding SME lending. March 26, 2007.
Iraqi Company for Bank Guarantees Brochure. English Arabic
Munro, David . “SME Lending". April 2007.
Munro, David. “Establishing an SME Lending Unit.” April 2007.
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