Certified Expert in SME Finance Frankfurt School of Finance and Management

Overview

Key facts

The goal of the Certified Expert in SME Finance course at Frankfurt School of Finance and Management is to support financial institutions in developing and transition countries establish good practices in Micro and SME finance. 

Small and medium-sized enterprises (SMEs) are important engines of growth, jobs and social cohesion. However, the creation, survival and growth of SMEs is often hampered by access to finance. Thus, access to SME finance has become a key priority in developing and transition countries. Since the early nineties, Frankfurt School of Finance & Management is combining advisory work, training, and policy advice with applied research. 

Education

The introduction to the course starts with positioning SME Finance compared to other client segments, e.g. corporate clients or retail clients. The learning goal of the course is to explain the main SME Finance principles, mainly focusing on credit risk analysis, the lending decision process and appropriate risk-taking intermediation as well as customer relationship management.

SME businesses face a number of specific risks in their business but SME lending is a profitable business for many MFIs and banks that use the right methodology –cash flow based lending- and appropriate decision making tools.

Understanding the challenges that small and medium business owners are facing is fundamental to the provision of excellent service and achieving good credit decisions.

The course follows the below listed basic logics and assumptions on SME Finance:

• SMEs require specific financial services and products according to their comparably small size and often limited scope.

• SMEs sometimes operate in informal or semi-formal environments; access to reliable (or even audited) financial data is therefore often limited.

• Since audited financial statements and sound business planning may not be available, the financial institution has to analyze the situation of the client carefully and verify verbal or internal statements.

• Once data is gathered and verified, lending decisions can be taken based on financial considerations and depending on risk appetite.