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  • EVALUATING TRADE CREDIT APPLICATIONS

  • SL-HE-EVALUATING TRADE CREDIT APPLICATIONS-EN
    ITC works with Business Associations and TSIs to enable them to reach a maximum of SMEs. We assist financial Institutions with improving and facilitating credit assessment as well as with enlarging their range of tailored SME products. Through partnerships at the regional and international level, we create a coordinated response to the trade finance challenges faced by SMEs, leveraging ITC’s tools and services.

    Information

    ITC provide an online loan assessment tool, LOANCOM, to assist those who lend money to SMEs. Expand this section to find out more and also to access selected relevant publications.
     LOANCOM, short for “Loan for Competence”, is ITC’s online decision support system for financial institutions who lend to SMEs. It guides financial institutions in evaluating an SME’s real potential by assessing its management competencies as well as traditional financial parameters. A tailored online application is developed with each financial institution and this can easily be integrated into the financial institution’s intranet and information systems.

    For each applicant, loan officers complete an online questionnaire containing targeted questions about the loan applicant’s financial and non-financial competencies. Based on this input, the software automatically generates a report highlighting the strengths and weaknesses of the applicant, as well as recommendations on how to proceed with the loan request. Development banks, commercial banks, Trade Support Institutions and Microfinance Institutions can benefit from this software.

    Links to Trade Finance publications – For TSIs or for distribution by TSIs

    Advisory Services

    The ITC’s Trade Finance for SMEs Programme outlines what can be done to support SMEs in their work.
     It does this by addressing four key issues:
    • Enhancing financial institutions’ understanding of SME needs, their ability to evaluate projects’ potential and related risks, and to monitor the performance of loan recipients
    • Coordination with other organizations (such as regional development banks) to mobilize long-term credit and guarantee lines dedicated to SMEs
    • Broaden the range and availability of financial services tailored to SMEs
    • Improve SME financial managers’ skills, in particular to strengthen their financial soundness and ability to submit bankable projects

     Strategic Approach Trade Finance SME 

    The trade finance for SME programme has two main entry points at the country level.
    The first implies setting up with a TSI a local team of skilled and certified counsellors capable of providing financial training, diagnostic and advisory services to SME managers. These counsellors are either generalists or sector specialists. The TSI and the counsellors receive coaching from ITC, as well as customized versions of ITC’s financial management tools.
    The second entry point involves ITC developing tailored versions of the risk assessment / management tool (LoanCom) in partnership with local financial institutions. ITC also facilitates dialogue between financial institutions and local TSIs to set-up effective monitoring and coaching systems for loan recipients.

    Training

    To find out more about ITC’s financial management training programme and certification, please expand this section.
     FINANCIAL MANAGEMENT TRAINING PROGRAMME CERTIFICATION
    TSIs building the skills of SME financial managers

    The program is directed towards local counsellors who will provide diagnostic services to SMEs and SME managers themselves. Through tailored training events and practical work, participants gain a better understanding of financial institutions’ practices and requirements, and are equipped with the right skills to develop bankable proposals and also to adopt sound financial management practices. The training program can be delivered as a stand-alone or as part of ITC’s Enterprise Competitiveness program. Qualifying participants are certified in financial management.

    Training Modules:

    1. How to assess SMEs’ financial needs
    2. Alternative sources of finance for SMEs
    3. Developing bankable proposals (incl. sample loan applications, business plans)
    4. Bookkeeping and cash flow management
    5. Analyzing financial statements
    6. Budgeting and forecasting
    7. Payment mechanisms and risk mitigation in international trade

    Networks

    ITC improves the skills of SME managers via a structured training, advisory and coaching system provided by a network of experts and TSIs, in conjuncture with a set of self tutorials, online tools and publications that enable SME managers to develop skills on their own.
     Coaching and support are provided before, during and after the loan, to ensure they not only access finance but also meet their loan obligations, thereby becoming creditworthy borrowers. By reaching a critical mass of SMEs, ITC contributes to business creation, export development, job generation, and thereby growth and poverty alleviation.

    Projects

    Much has been said about the mechanisms that have prompted the global financial and economic crisis. It is now becoming urgent to realise and measure the concrete impact of the crisis on the millions of SMEs worldwide, and its longer consequences for the productivity and competitiveness of enterprises.
     It is also urgent to develop and implement short and medium-term solutions specifically designed to restore confidence, trust and dialogue between SMEs and financial institutions. SMEs are the engine of economic development, they constitute the majority of business enterprises, and they are vital for employment generation and poverty alleviation. To read more about what can be done to assist SMEs in this time of crisis, please click here.
    In order to carry out our projects, we have developed partnerships with sister organizations and funding partners. For more information on who funds our work and how, please click here.