Lenders Best Practice Forum Launched in Manila

ShoreCap Exchange, a provider and facilitator of banking services to small business banks and microfinance institutions, brought the first Global Small Business Lender Training to Manila in collaboration with Planters Development Bank and ShoreBank Advisory Services (SASI), the international consulting arm of ShoreBank Corporation of the United States.

Small businesses are the largest generator of jobs and incomes in most countries world-wide. Yet thousands of healthy small businesses are ignored by banks because they are more time-consuming and costly to underwrite than larger loans, they often do not have perfect credit histories or sufficient collateral, and they are assumed to be disproportionately risky. For the past thirty years, ShoreBank Corporation (parent company to ShoreCap Exchange and SASI), and Planters Development Bank in the Philippines have proved these banks wrong by building viable banking businesses dedicated to providing access to capital to previously excluded borrowers.

Small business lending is both profitable for banks and good for employment generation and income growth. But it does involve a different approach - one focused on cash-flow based underwriting, rather than collateral, and an acute sense of management ability. ShoreCap's initiative in Manila was a way to share the experiences of ShoreBank and Plantersbank along with some of the most successful small and micro lending institutions in developing and emerging economies with thirty lenders from Asia, Africa and Eastern Europe.

The ShoreBank - Plantersbank combination is a powerful one: - ShoreBank, a $1.7 billion community development bank, is the first and largest bank focused on underserved markets in the United States. It has also been active, through its international consulting company, SASI, in over twenty countries strengthening small business banks and microfinance institutions. SASI has worked with banks on a long-term basis to produce over $300 million in small business loans to entrepreneurs that were often unbanked by the traditional commercial banking sector.

Plantersbank (Planters Development Bank) is a privately-owned bank with total assets of about $600 million and a nationwide network of 63 branches in the Philippines. It too, is the country's largest private development bank focused on underserved entrepreneurs and households.

Thirty two small business lenders from 10 Asian, African and Central European countries, representing 13 financial institutions, attended the banker -led training in Manila to learn how to improve their small business lending methodologies to reach further and deeper into their underserved markets. The learning forum was also attended by ShoreCap stakeholders, such as the Asian Development Bank, an investor in and partner to ShoreCap since its inception in 2003 and a shareholder of Plantersbank since 1987. Participants have already requested follow up meetings and events to further build on the collegial relationships formed and the lending methodologies presented during the Manila training.

"Trainers were aware of the different countries and respective policies of each country participant. Focus is mainly on what is essential and not the entire matter." "I came wanting to learn more about SMEs and to see whether how we administer SME lending is at par with other similar institutions and I got both." "Every session was carefully chosen and only the important details were emphasized. I think that's very important." "At the end of the day, all goes back to 'cash'. Uniform Cash Flow format was a new thing we may try to implement in higher loan amount approvals."

This event formed part of ShoreCap Exchange's unique peer learning program wherein focused events and opportunities are designed to enable bankers to learn from other bankers how to improve their own institutions through shared best practices. ShoreCap Exchange conducts several peer learning events each year that are focused on small business and microfinance institutions in Asia, Africa and E. Europe that are committed to increasing outreach and service to underserved communities. Read more about the program and means of participation at http://www.shorecapexchange.org/ken.php.