Credit Risk Analysis of SMEs

Event | 29 May 2015
Bangkok, Thailand

Purpose

This event will facilitate information exchange and impart knowledge to government officials on effective ways of analyzing credit risk for the purpose of expanding SME financing. There will also be a discussion of deposit insurance.

Background

Small and medium enterprises (SMEs) throughout Asia are constrained by the lack of access to affordable finance. A key barrier is insufficient information regarding creditworthiness. Commercial banks find it costly to obtain information from prospective borrowers and the information is often not provided by public sources. The result is that SMEs often lack the finance necessary to expand their businesses, invest in new technology, meet working capital requirements, and venture into new global markets.

Problems of asymmetric information can be mitigated with the development of adequate sources of financial data and the use of techniques to analyze the credit history and credit risk of enterprises. The establishment of a credit risk database and the inclusion of SMEs in that database provide the necessary institutional structure and source data. These institutions require the close cooperation of government agencies with a shared commitment to improve the flow of finance to SMEs.

Objectives

In Japan, the Credit Risk Database (CRD) organization was established more than 10 years ago with the help of the Small Business Bureau of the Ministry of Economy, Trade and Industry. More than 1,000,000 data points were collected through credit guarantee organizations all over Japan. Statistical analysis has been applied to the data to estimate expected default rates of SMEs in various sectors. This experience from Japan will be presented and discussed with participants at the workshop.

The workshop seeks to improve the capacity of government officials to establish effective credit databases on SMEs with the goal of expanding formal credit access. Officials will learn of the experiences of other countries and will also be asked to present the current situation of credit information in their respective countries. There will also be a discussion of deposit insurance.

Participants

Senior and mid-level officials from central banks and agencies responsible for SME development, SME finance and credit ratings. Along with the participation of officials from Thailand, about 12 participants will be invited from ADB developing member countries in ASEAN.

Participant responsibilities

Active participation in discussions, share views and experiences, engage in networking, and collaborate to strategize new approaches and understandings.

Output

  • Create an understanding of improving credit risk analysis of SMEs.
  • Demonstrate how data on SMEs can be used to generate credit risk analysis.
  • Create a network of colleagues from different countries to share ideas on the topic.
  • Improve understanding of the optimum premium of deposit insurance.
  • Presentation materials and summary of proceedings to be uploaded on ADBI website.

How to Register

By invitation only.

Language

English

Partners and or sponsors

Bank of Thailand

Time of event

9:30-17:30