ADB to Help Banks Boost Risk Management Capacity for SME Lending

ADB to Help Banks Boost Risk Management Capacity for SME Lending

ADB to Help Banks Boost Risk Management Capacity for SME Lending

The FINANCIAL -- The Asian Development Bank (ADB) and Myanmar Banks Association are holding a 4-day workshop, starting on June 15, to help local commercial banks raise their risk management capacity for lending to small and medium-sized enterprises (SMEs).

“With sound risk management, financial institutions will be able to promote access to financial services by SMEs, which is crucial for promoting sustainable and inclusive growth in Myanmar,” said Thierry de Longuemar, ADB Vice President for Finance and Risk Management. “Strengthened risk management will also help promote the development of the financial sector.”

The workshop will cover key aspects of credit risk management and operational risks in SME lending. Participating bank loan officers and risk managers will gain practical insights into formulating credit policy, assessing loan applications, and monitoring loan portfolios more effectively. More than 30 participants from 19 local banks and the Central Bank of Myanmar are expected to attend, according to ADB.

SMEs are the backbone of the private sector in Myanmar—accounting for over 90% of companies and over 70% of employment. However the sector has been hampered by a lack of access to finance, partly because of restrictive collateral requirements, but also because of a lack of capacity among local banks to assess and manage operational and credit risks for smaller businesses.

The workshop is organized as part of ADB’s Technical Assistance for Enhancing Regional Capacity for Risk Management project, which will complement ADB’s non-sovereign operations in Myanmar. ADB’s operations in Myanmar focus on infrastructure development, education and skills development, and private sector development, including access to finance.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region.  In 2014, ADB assistance totaled $22.9 billion, including cofinancing of $9.2 billion.