SME Financing Expriences

I joined Meezan Bank as Credit Manager SME, before adding the word credit to my designation it was just "Manager SME" as it was the much familiar designation within Meezan Bank. Whenever I introduced my self as Manager SME, the next question was "Yeh SME Kya hota hai ?" (What SME means ?) and then I always had to explain the details. So, I ordered my visiting cards with the word Credit before Manager SME which was also my official designation as per HR and I found it a much familiar term among the business community. I wonder if we have developed an alternative term in Urdu for SMEs.
  We are facing so many challenges and we should be ready so we can effectively tackle them rather than getting demotivated or discouraged by the response. The first para of this post shows the biggest challenge, the "language gap". The SME owner aka "Seth Sahab" do get impressed by the fine suit and tie, but to make them comfortable and speak from their heart, you have to make them comfortable by talking in the language they are most comfortable in. That is the key to the whole relationship, because when you make them comfortable to speak up, they would tell you all the stories and details about them and their business, and that is what you need the most in case of SMEs. These stories would tell you all the qualitative information you need which has the major weightage in case of SMEs. Although quantitative data is important, but qualitative data should be give more weight in assessing an SME client.    

New Time Limitation policy for completion of JAIBP (Effective from Winter-2015)

Here are some updates regarding JAIBP. I am reproducing the news given on the below mentioned link,

• Candidate registered from Winter -2015 & onwards will be given a time frame of 08 years to complete JAIBP.

• If the candidate is unable to complete the JAIBP program in 08 years, all of the complete and incomplete stage(s) will be lapsed and the candidate(s) will be required to enroll in JAIBP again as a fresh candidate.

• Candidate registered prior to Winter-2015 will be allowed 08 years from Winter-2015 to complete their JAIBP. If the candidate is unable to complete the JAIBP program by Summer-2023, all of the complete and incomplete stage(s)/part(s) will be lapsed and the candidate(s) will be required to enroll in JAIBP again as a fresh candidate.

Source :  http://www.ibp.org.pk/news.aspx?id=49

Free IBP eBooks - Download Free IBP eBooks

Now you have no excuse left to start your IBP Exam preparation, Free Books can be downloaded now,

Plz click on the link to open/download the eBook file,

Introduction To Financials Systems - IBP Book 

IT (Information Technology) in Banking Sector

Economics

HR Management

Lending :Operations, Products & Risk Management

These Books can be used to prepare for the JAIBP - Junior Associate of Institute of Bankers Pakistan exams.

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Change in Exam Cycle & ISQ Summer-2014 session

I have received an email from IBP announcing some changes in their exam cycle and other updates. Main points are mentioned below ,

Enrollments for ISQ (JAIBP, AIBP & Special Certificate) session of
Summer-2014 are open.

There are certain changes in IBP exam cycle. From 2014 onwards, the summer
exams shall be held in April while the winter exams shall be held in
October. The Summer 2014 exams are expected in the 3rd week of April.

Get enrolled for Summer examination session scheduled
for April 2014.

The last date to enroll
for ISQ Summer-2014 examination is February 15, 2014.

The exam fee for the upcoming session is PKR, 1500 per subject.

Please ensure that the payment instrument (Demand Draft/Pay Order) should be
drawn on Karachi branch.

To download JAIBP examination form please visit
<http://ibp.org.pk/pdfs/files/ISQ Form A4.pdf>
http://ibp.org.pk/pdfs/files/ISQ%20Form%20A4.pdf



UAN: (021) 111-IBP-ISQ (111-427-477)

E-mail: examination@ibp.org.pk

PABX: (021) 35205129 ext. 542, 548

SWIFT - Society for Worldwide Interbank Financial Telecommunication

SWIFT or Society for Worldwide Interbank Financial Telecommunication provides a network to allow financial and non-financial institutions (e.g. corporates) to transfer financial transactions through a 'financial message'.

Currently SWIFT's network can support the following message standards:^[

SWIFT MT

SWIFT messages, developed by SWIFT Standards Laboratories Private Limited, consist of five blocks of data including three headers, message content, and a trailer. Message types are crucial to identifying content.

All SWIFT messages include the literal "MT" (Message Type). This is followed by a 3-digit number that denotes the message category, group and type. Consider the following example, which is an order to buy or sell via a third party:

• Example: MT304

The first digit (3) represents the category. A category denotes messages that relate to particular financial instruments or services such as Precious Metals (6), Treasury (3), or Travelers Cheques (8). The category denoted by 3 is Treasury Markets.

The second digit (0) represents a group of related parts in a transaction life cycle. The group indicated by 0 is a Financial Institution Transfer.

The third digit (4) is the type that denotes the specific message. There are several hundred message types across the categories. The type represented by 4 is a notification.

Overview of SWIFT MT Categories:

Message Type	Description
MT0xx	System Messages
MT1xx	Customer Payments and Cheques
MT2xx	Financial Institution Transfers
MT3xx	Treasury Markets
MT4xx	Collection and Cash Letters
MT5xx	Securities Markets
MT6xx	Treasury Markets - Metals and Syndications
MT7xx	Documentary Credits and Guarantees
MT8xx	Travellers Cheques
MT9xx	Cash Management and Customer Status

Source : www.wikipedia.org

SMEs are now further classified into SEs & MEs

In the recent issue of PRs SBP has further categorized SMEs into Small Enterprises (SE) and Medium Enterprises (ME) on the basis of below mentioned criteria,

Definition of Small Enterprise 
A Small Enterprise (SE) is a business entity which meets both the following parameters: 

Number of Employees	Annual Sales Turnover
*Up to 20	Up to Rs. 75 million

*including contract employees 

Definition of Medium Enterprise 
Medium Enterprise (ME) is a business entity, ideally not a public limited company which meets both the following parameters: 

*Number of Employees	Annual Sales Turn-Over
21-250 (Manufacturing & Service MEs)  21- 50 (Trading MEs)	Above Rs 75 million and up to Rs 400 million  (All types of Medium Enterprises)

*including contract employees 

Revised Prudential Regulations for Small and Medium Enterprise (SME) Financing

SBP has issued IH&SMEFD Circular No. 08 of 2013 in which they have issued revised PRs for Small & Medium Enterprises. Before this SBP issued separate Prudential Regulations (PRs) for SMEs in 2003 which has now further been revised with the following structure:

1. General Prudential Regulations that apply on both Small and Medium Enterprises
2. Specific Prudential Regulations for Small Enterprise Financing
3. Specific Prudential Regulations for Medium Enterprise Financing

Revised PRs are applicable with immediate effect for the fresh financing facilities. However, since the banks/DFIs need to segregate their existing SME portfolio according to the new definitions and revised classification criteria, Banks/DFIs are allowed a maximum implementation period upto September 30, 2013 for their existing portfolio. 

Revised Regulations (R-1) specifically require banks to prepare a comprehensive SME specific Credit Policy duly approved by BoDs. Risk Management Department is also requested to update existing policies, guidelines and procedures (including TAT as per SE R-10) to the effect and accordingly its approval from concerned quarters.

In these PRs they have provided different definition of Small Enterprises and for Medium Enterprises. This is because banks were probably much focusing on the medium level enterprises and small enterprises which are more in number and have much more need of bank credit, were being neglected. 

This seems a good step, as this shows that SBP is constantly working on their strategy of bringing credit for small businesses which play a very vital role in the development of economy.