The challenge of tackling global poverty can be addressed by improving the livelihoods and income opportunities available to disadvantaged people. Poverty reduction requires more than just economic growth. But the latter is an essential factor for the private sector to create jobs and additional income which will benefit the poor. Respective strategies towards broad-based growth need to strengthen micro, small and medium enterprises (MSMEs). These ventures account for the majority of economic activities in developing countries and provide significant employment opportunities.
Small and medium enterprises (SMEs) are widely recognized today as the backbone of national economic development. Though small individually, the SME sector as a whole has gradually emerged as a dominant economic player. They engage in economic activities ranging from small-scale enterprises to modern industrial units using sophisticated technologies. Though recognized as a priority sector in almost all countries, small businesses often have difficulties financing growth and innovation. SME financing is considered by many financial providers to be a risky activity that generates high transaction costs and low returns on investment.
BAZ recognizes the crucial need for SME-specific products, services and government-linked assistance schemes to be made readily available for small and medium enterprises. We offer an immediate access to a wide range of expert business consultancy products and services to aspiring entrepreneurs and current SME owners to initiate or further develop their businesses.
We offer an immediate access to a wide range of expert business consultancy products and services to aspiring entrepreneurs and current SME owners to initiate or further develop their businesses.
Financially sustainable SME-specific products and services are also available under extended levels of consultancy. Our experts follow a comprehensive approach to SME finance. It comprises the set-up of specialized SME units, product development, credit scoringtechniques, risk management framework and management information systems.
We are committed to providing entrepreneurs and companies with:
Informal businesses are the basis of economic life in the developing world as it is evident from the fact that the microfinance has existed in various forms for decades, and even more in the Asian Continent, where informal lending and borrowing lives back for several thousand years.
In the recent past microfinance sector has seen many innovations, starting from the mobile banking, where mobile phones are used to send and receive money for the purpose of microfinance; to the introduction of structured loan products for micro-entrepreneurs to address their business needs.
We offer technical assistance (TA) to our partner financial institutions to allow them to enjoy the first mover advantage by addressing the needs of the untapped segments. In downscaling projects, BAZ assists commercial banks in developing or expanding their lending activities to small businesses. This occurs either by adding another product line or—ideally—by revamping business unit.
The credit methodologies used for best-practice SME lending is conceptually distinct from the techniques employed by “conventional” banks in their retail and corporate lending activities. For the introduction of the specific methodologies and tools, the environment needs to be able to absorb them. This is crucial for the commercial success of a downscaling project. Setting up a separate SME lending business unit is therefore ideal.
In a typical downscaling project, we help the client bank to design and set up the new SME business unit. BAZ advises and manages this unit or might temporarily also take over management responsibilities of the SME business unit. This is important if the client bank does not exhibit (or cannot spare) staff with experience in best-practice SME lending techniques. We conduct comprehensive training on loan management, risk mitigations, cash flow based lending techniques and staff supervision to build up in-house management talent.
The process also involves business process re-engineering, devising a revised strategy and business plan, risk management and portfolio development.