How Do Banks Serve SMEs? Business and Risk Management Models
This study describes the business and risk management practices that banks use to serve small and medium enterprises (SMEs). To do so, we use recently collected evidence from Argentina and Chile for a significant number of banks in each country, ga...
| Main Authors: | , , , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/06/16404267/banks-serve-smes-business-risk-management-models http://hdl.handle.net/10986/12959 |
| Summary: | This study describes the business and
risk management practices that banks use to serve small and
medium enterprises (SMEs). To do so, we use recently
collected evidence from Argentina and Chile for a
significant number of banks in each country, gathered
through on-site meetings, a tabulated questionnaire, and a
detailed data request. We find that banks are setting up
separate departments to serve the segment, targeting many
SMEs from all economic sectors and geographic regions. Banks
use relationship managers to seek out new clients. Risk
management and loan approval is separate from sales, mostly
centralized, but not largely automated. Knowing the client
is still crucial to minimize risks. Overall, the patterns we
uncover suggest that banks are in the middle of an on-going
learning process, by which they are developing the structure
to deal with SMEs in a sustainable basis over the coming years. |
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