Credit Sense ā Approach and Perspectives
Risk officers and Relationship managers are always at each otherās throats owning to difference in their perspective, often missing out what lies beyond the optics. Sumit Kakkar draws from his experience to share some key things that both should look at.
Banking after Moratorium: Three key Monitorables
With the moratorium behind us, the attention is now on how the loan portfolios will behave. Sumit Kakkar identifies three crucial things that banks need to monitor closely.
Over reliance on credit rating: How Banks constrain SME Lending
Banks are flush with liquidity, but still grappling with twin issues ā where to deploy the money and how to source the right credit which meets the stringent criterion. Is the straight jacket approach of the bankers and high reliance on credit rating constraining SME lending? Sumit Kakkar shares his perspective
āEmergency Credit Guaranteeā for MSME ā Decoding the fine print
Emergency Credit Guarantee for MSME has been unveiled. GOI seems to have pleasantly surprised the banks. There are minimal ambiguities in the eligibility, end use, risk weights and limit assessment. However, the devil lies in the invocation process. Sumit Kakkar evaluates the fine print
Can Credit Scoring replace Judgemental Lending?
With all the excitement in the last decade about data and credit scoring, there are some areas that may still need the human skill tom judge credit risk. Amit Balooni explains the criteria for retaining judgement in lending.
Distribution- Do we need a Relationship Manager? (SME Lending Models 5)
Some crossroads our clients encounter while setting up distribution/origination models: Do we set up a new SME vertical or leverage Branch resources? Is third party agents a good idea? To what depth in the market should we penetrate? Should we segregate the Sales and Relationship functions? The answers lie hidden deep within the organisationās current […]
Is Loan a Product? (SME Lending Models 4)
Lending business can be summed up in two sentences: I (customer) need money. You (Bank) give money and charge interest. But lending isnāt so simplistic! Consider the permutations- āI need money now, but you will give after 4 weeks.ā āYou are reluctant but may give loan with 110% security. I donāt have it.ā āYou give […]
Is Technology the panacea? (SME Lending Models 3)
Technology has benefits. It can improve TAT, data access, accountability, reduce operational risk & build competitive advantage. Full workflow digitisation suite- Tabs +CRM+LOS+CBS integration+ LMS+DMS, seems impressive. āLetās get it automatedā is an oft repeated indulgence we hear during our engagements. But the devil is in details! Considering investment in any scalable tech is high […]
Financial Analysis is not Credit Risk Assessment (SME Lending Models 2)
Financial analysis is the most exciting part for many bankers. Evaluation of ratio trendlines, NWC availability or future cash flows is logical & fun way to credit decisioning. Possibly the next best thing to being an oracle! Who can counter argue when nos. show the future? Here is what spoils the fun: In most geographies, […]
Lending for Financial Inclusion- Gold at the Bottom of the Pyramid
āA box without hinges, key or lid, yet golden treasure inside is hid.ā ā JRR Tolkein Following the wrong trail The story of āFortune at Bottom of the Pyramidā(BOP)was told by Late C K Prahalad and Stuart Hart way back in 2002 in which they articulated the wrong assumptions that large corporations make about BOP. […]