world bank - union of arab banks access to sme finance...

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World Bank - Union of Arab Banks

Access to SME Finance Survey

Country:

Bank’s name:

Name of CEO or President:

Bank’s Activity: [Commercial] [Investment] [Islamic] [Other] (please circle as appropriate, and specify if 'other')_________________________

Ownership structure: [Private] [State] [Public] (please circle)

Person(s) who filled out the questionnaire (name & title):

Person’s contact details:

Telephone number:

Fax number:

Email Address

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Section 1: Strategic Overview

1 Provide your Bank’s definition criteria for a Small Enterprise (SE). From To

Client size in terms of total sales/turnover:

US Dollars (current rates)

Client size in terms of total assets:

US Dollars (current rates)

Client size in terms of total employees: employees

Other, please specify:

2 Provide your Bank’s definition criteria for a Medium Enterprise (ME). From To

Client size in terms of total sales/turnover: US Dollars (current rates)

Client size in terms of total assets: US Dollars (current rates)

Client size in terms of total employees: employees


3 Does the bank currently have SMEs among its clients? Yes

3a. If yes, does the bank have a separate unit managing the banking relation with SMEs? Yes

3b. If no, do you plan to add SMEs as clients in next 12 months? NA

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4 To what degree is your involvement with SMEs driven by the following factors?

(insert an 'x' in the appropriate column) Very

Important Important

Marginally Important

Not Important

Market Saturation (intense competition for large corporates and/or retail customers)

Diversification (excessive exposure to large corporates and/or retail customers)

Returns (profitability in the SME segment)

Supply Chain links (possibility to seek out SMEs through existing relations with large clients)

Cross Selling (selling a variety of products to the SME customer)

Government Incentives and Support Programs

Others (specify):

5 To what degree the following factors adversely affect your decision to lend to SMEs?


Important Important


Not Important

Lack of SME Transparency (poor quality of financial statement, informality, lack of business skills)

Lack of reliable collateral by SME's

Inadequate Credit Information Systems (lack of credit bureaus and registries for SME's)

Weak creditor rights (weak collateral law, bankruptcy regime, contract enforcement, judicial efficiency)

Restrictive regulations and legal environment (interest rate ceilings, tax regime, anti-money laundering)

Excessive competition in the SME segment (presence of state banks, niche players, narrow margins)

Lack of demand from SME's (weak demand from creditworthy SME's, high interest rates)

Lack of Sharia Compliant Products (non-availability of Islamic products)

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Bank specific factors (lack of lending technology and skills, strategic direction, limited geographic coverage)

6 To what degree following institutions are involved in SME financing in your country?


Involved Involved

Marginally Involved

Not Involved

Small private commercial banks

Large private commercial banks

State-owned commercial banks

State-owned specialized banks

Islamic Banks

Leasing companies

Other financial intermediaries outside the banking system e.g. public funds

Other (e.g. social funds, government agencies), please specify:

7 What is your long-term target for SME lending as a % of total lending % of total

Section 2: SME Products and Market

8 What type of services does your bank provide to SMEs?

(insert an 'x' in the appropriate column)

Deposits and cash management products

Loan products

Lines of credit/overdraft facilities

Trade finance (e.g. letters of credit)

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Leasing products

Payments and transfers products

Insurance products

Advice, technical assistance

9 What types of distribution channels does your bank have which are important for relations with SME clients?


Own branches (full-service branch)

Own branches (limited-service branch)

Mobile branches

ATMs

Points of sale

Agents (post office, retail outlets, other non-bank entities)

Internet banking

Self service (automated) banking

Phone banking

Other, specify:

10 Please indicate the main characteristics of your loans to SMEs

Interest Rate

Maximum (% p.a.)

Minimum (% p.a.)

Currency

Local (% of total SME loans)

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Foreign (% of total SME loans)

Term/Maturity

Shorter than one year (% of total SME loans)

Longer than one year (% of total SME loans)

Purpose

Investment (% of total SME loans)

Working Capital (% of total SME loans)

Other (e.g. Trade) (% of total SME loans)

11 Does your bank offer Sharia-compliant products?

11a. If yes, kindly indicate the products your bank offers


Murabaha

Mudaraba

Ijara

Musharaka

Istisna`a


11b. If no, do you plan to offer Sharia-compliant products in next 12 months?

12 Are collateral requirements higher for SMEs than for larger corporates?

12a. If yes, please indicate the degree of importance of the following factors

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Important Important


Not Important

SMEs are less stable

SMEs have less competent management

SMEs are harder to evaluate (lack of information)

SME contracts are harder to enforce

SMEs’ collateral is more difficult to seize in case of default


13 Please indicate the government programs that exist and their importance in your decision to lend to SMEs

(insert an 'x' in the appropriate column) Program

exists Overall Impact

Yes/No Very

Important Important


Not Important

Guarantees

Co-financing

Subsidized lending

Lower Reserve Requirements


14 Does your bank accept movable assets as collateral for SME lending?

15 Are there difficulties in registering fixed and movable collateral for SME lending?

Fixed Assets

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Movable Assets

16 Are there difficulties in enforcing (seizing) fixed and movable collateral for SME lending?

Fixed Assets

Movable Assets

17 Are there difficulties in selling fixed and movable collateral for SME lending?

Fixed Assets

Movable Assets

18 Do you use a Credit Registry or Credit Bureau as part of the loan analysis process?

Credit Registry

Credit Bureau

19 If there is a Credit Registry is there a threshold for minimum loan size reported? What amount?

Yes/No

Amount

20 How would you rate the usefulness of the credit registry or credit bureau for assessing SME credit risk? (insert an 'x' in the appropriate column)

Very Effective

Effective Marginally Effective

Not Effective

Credit Registry

Credit Bureau

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21 Do you have programs targeted toward women-owned businesses?

22 Have you observed any difference in repayment behavior between men and women-owned businesses?


Yes, better for women-

owned businesses

Yes, better for men-owned

businesses

No Difference

NOT OBSERVED

23 What is the percentage of female loan officers? %

24 Is the percentage of defaulted loans lower by female loan officers? %

Section 3: Risk Management

25 Provide your assessment of the risk of default (%) of the average SME loan relative to the average loan of other type


SME loans less risky

than

SME Loans equally

risky than

SME Loans

more risky than

Large corporates

Consumers (credit card, overdraft, non-collateralized) Housing Microfinance

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26 What risk techniques and selection criteria does your bank use to determine the SMEs it will target?


Credit scoring internal (built using your own data) Credit scoring external (credit bureau scores) Rating system internal (e.g. financial analysis of SME, qualitative analysis of SME) Export orientation Growth prospects of specific SME sectors Size of exposure to specific SME sectors Firms that are existing clients Supplier to a firm that’s an existing client

27 If your bank uses a scoring model, do you utilize an automated application processing system to approve loans for SME clients? Yes/No

28 If your bank uses a scoring model, then please provide % % of small business applicants are scored % of credit applicants are approved 29 Do you run any of the below mentioned stress test exercises on the SME portfolio?


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Currency shocks Interest rate shocks Slow-down in a particular sector Commodity price shock (when relevant) GDP shock (when relevant) Other, please specify: 30 After how many days is a non-serviced SME loan moved to non-accrual? Days

31 How often are SME loans reviewed and re-rated?


Quarterly Semiannually Annually

32 What is the average number of months it takes to recover all or a significant proportion of a defaulted SME loan? Months

Portfolio to new to answer

33 What is the average percent share of SME problem loans recovered? %

Portfolio to new to answer

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34 How is your institution complying with the new Basle II regulation, as regards the computation of capital requirements against credit risk?


Standardized Approach Internal Ratings-based Approach Not yet adopting Basle II.

35

The overall impact of the adoption of Basle II on SME lending by your institution will be:

(insert an 'x' in the appropriate column) Positive Neutral Negative Don't Know

36 Will Basle II impact the selection of SME size


Will favor smaller SMEs

Will favor larger SMEs

No impact on SME

size

Don't Know

37 Are your SME clients informed of the factors that drive ratings or scorings? 38 For regulatory purposes, are SMEs classified in your retail or corporate portfolio?

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Retail Corporate

Section 4: Data Request SME Lending Dec 07 Dec 08 June 09 39a. Outstanding portfolio (loans) - total for bank (currency amount) 39b. Outstanding portfolio (loans) with households (currency amount) 39c. Outstanding portfolio (loans) with small and medium enterprises (currency amount) 39d. Of which: Outstanding portfolio (loans) with small enterprises (currency amount) 39e. Of which: Outstanding portfolio (loans) with medium enterprises (currency amount) 39f Outstanding portfolio (loans) with large enterprises (currency amount)

Dec 07 Dec 08 June 09 40a. No. loans disbursed - total for bank 40b. No. loans disbursed to households 40c. No. loans disbursed to small and medium enterprises 40d. No. loans disbursed to large enterprises Dec 07 Dec 08 June 09 41a. No. active clients (borrowers) - total for bank 41b. No. active clients (borrowers) - households 41c. No. active clients (borrowers) - small and medium enterprises 41d. No. active clients (borrowers) - large enterprises Dec 07 Dec 08 June 09

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42a. Percentage (%) of loan applications approved per year - total for bank 42b. Percentage (%) of loan applications approved per year - households 42c. Percentage (%) of loan applications approved per year - small and medium enterprises 42d. Percentage (%) of loan applications approved per year - large enterprises Dec 07 Dec 08 June 09 43a. % of gross bank loan portfolio secured by collateral 43b. % of gross household loan portfolio secured by collateral 43c. % of gross small and medium enterprise loan portfolio secured by collateral 43d. % of gross large enterprise loan portfolio secured by collateral Dec 07 Dec 08 June 09 44a. % of gross bank loan portfolio covered by guarantees 44b. % of gross household loan portfolio covered by guarantees 44c. % of gross small and medium enterprise loan portfolio covered by guarantees 44d. % of gross large enterprise loan portfolio covered by guarantees

Dec 07

Dec 08

June 09

45a. Islamic lending portfolio (total for bank) 45b. Islamic lending portfolio with households (currency amount) 45c. Islamic lending portfolio with small and medium enterprises (currency amount) 45d. Islamic lending portfolio with large enterprises (currency amount) Further Data 46 Could you provide us with the bank's ownership structure (% of equity owned by)? %

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1. Government/State 2. Private sector (domestic) 3. Private sector (foreign) 4. International Financial Institutions (E.g. IFC, Islamic Development Bank) 5. Other, please specify 47 Average Interest Rates for lending to firms (1 year) % Large corporates (prime rate) Minimum SME rate Average SME rate Maximum SME rate Typical microfinance rate 48 What is the number of branches your bank has in this country? 49 What is the number of ATMs your bank has in this country? 50

What is the number of points of sales your bank has in this country

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