Partners of FMG training programs include Bangladesh Bank, the Royal Monetary Authority of Bhutan and the Indian  Institute of  Bank Management (IIBM)  in North East India.

FMG has brought in international experts for apex training institutions such as the Bangladesh Institute of Bank Management (BIBM) and the IIBM to complement local trainers by adding international experience and by transferring best practices to the local markets.

In Bangladesh, Bangladesh Bank (central bank), requested SEDF assistance for developing Risk Management Guidelines. A Focus Group identified five core risk areas related to banking and issued guidelines on managing risks in the following areas of Credit Risk Management, Foreign Exchange Risk Management, Asset Liability Management, Internal Control & Compliance, and Anti-Money Laundering. Bangladesh Bank requested SEDF to assist in training bankers on these guidelines in collaboration with Bangladesh Bank Training Academy (BBTA). Training in the core risk areas has been implemented in four phases. The Focus Group members of Bangladesh Bank has also been involved in this training process as local consultants.

The FMG program is also working with the Anti-Money Laundering Department of Bangladesh Bank in order to publicize the concept for the bankers and SME borrowers all over the country by organizing workshops and training programs. FMG is developing in collaboration with Bangladesh Bank a simple but complete document on issues related to anti-money laundering in the form of a booklet for distribution to all the financial institutions in the Bangladesh.

A study on existing trade barriers between Bangladesh and North East India was organized by FMG. Training programs on different aspects of Trade Finance have been launched. A study tour to other regional well-reputed financial institutions has been arranged.

The FMG team is working towards a new culture of compliance with special reference to Corporate Governance and improved CRM with reference to SME finance. Bangladesh Bank is one of the stakeholders of this project. The Training department organizes study tours for bankers to gain hands-on training on SME banking in different SME financial institutions in the region.

Working with Partner Financial Institutions (PFIs)

The total number of SEDF FMG PFIs now stands at 13.

SEDF PFIs have subscribed to the concept of SME finance and have worked towards this. To support them in this process, SEDF undertakes TA programs that mainly revolve around four strategic pillars; commitment, knowledge, efficiency and tools. A fifth pillar has been introduced: increasing volumes and access to SME clients in a large scale.

Commitment: to be measured through strategic allocation of resources to SME finance; can be achieved through advocacy, strategic interaction, benchmarking with peer financial institutions.

Knowledge: to be spread at various levels of the institutions; can be achieved through training, exposure to the best practices, institutional development programs.

Efficiency: an imperative for sustainability of the SME finance program; to be measured in reduced time and costs of SME loan processing; can be achieved through instituting performance-based HR polices, process automation and procedural streamlining.

Tools: measured through the number of financial products available to SME finance; can be achieved through introduction of new products such as factoring.

The underlying principle driving all TA programs is sustainability.

Examples of activities:

Enhancing Commitment to SME Finance

Advocacy: SEDF staff members regularly meet with PFIs keeping them abreast of the latest developments in SME finance techniques, benchmarks and trends.

SME strategy formulation: SEDF helps PFIs in the process of SME strategy formulation through conducting institutional diagnostics, structuring strategy workshops and creating SME Departments.

Spreading Knowledge of SME Finance

Study tours to best practice regional SME finance institutions: SEDF organizes study tours for PFI senior management to best practice SME finance institutions in India, Sri Lanka...

SME sales training: SEDF has organized training programs on Sales Leadership in order to enhance selling skills of the field level PFI professionals.

Executive development training programs: In order to enhance managerial skills of the PFI branch managers supervising the SME workforce, SEDF organizes training programs on the “Fundamentals of Good Management.”

Improving Efficiency in SME Finance

Credit Scoring: SEDF has developed Credit Scoring modules at 7 PFIs. This enables these PFIs to reduce the time requested for screening SME loan applications. Development of the modules are facilitated by SEDF/IFC experts through interactions and workshops with the PFI professionals.

Comprehensive Automation of PFIs: SEDF has assisted a PFI in its automation through implementation of a core banking software. The bank is now online thanks to this TA project with SEDF FMG.

Risk Grading Framework: A comprehensive risk grading framework has been developed for a PFI which enables the company to better manage its lending risks and adopt risk-based loan pricing policies. The assignment was carried out by the leading Indian credit rating agency, CRISIL. Another NBFI has requested SEDF assistance to develop its Risk Grading Model based on this first TA Project.

IT Diagnostics: SEDF conducted IT diagnostics for five PFIs. The diagnostics were aimed at identifying gaps in software and hardware infrastructure for catering to the SME client segments.

Redefining the HR policy: SEDF has helped a PFI in instituting a performance-based human resources policy which encompasses recruitment, job description, assessment, incentives and development of the bank staff. The study was carried out by a local consulting firm.

ISO diagnostics: with a view to streamlining processes/procedures and promoting efficiency, SEDF has carried out an ISO diagnostics of a PFI. The PFI got its ISO 9001 certification in July 2005.

SEDF assists two PFIs in setting up separate SME departments. This includes establishing the appropriate strategy, organizational structure, operational processes and risk management. There is a demand from several partners to separate the SME activity that will require TA from SEDF.

SEDF is conducting a detailed segmentation study of the SME market in Bangladesh. This is in response to PFI demands on pertinent information on various profitable SME segments in the country.

SEDF also assists a number of PFIs with TA on the following areas: