In downscaling projects, LFS assists commercial banks in developing or expanding their lending activities to small businesses. This occurs either by adding another product line or – ideally – by creating a separate business unit.
The “Unit” Approach
The credit technologies used for best-practice MSME lending are conceptually distinct from 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 MSME lending business unit is therefore ideal.
Role and Services of the Consultant
In a typical downscaling project, LFS helps the client bank to design and set up the new MSME business unit. LFS advises or manages this unit during the start-up phase. Temporarily, LFS might also take over management responsibilities of the MSME business unit. This is especially important if the client bank does not exhibit (or cannot spare) staff with experience in best-practice MSME lending technologies. LFS conducts comprehensive training and staff supervision to build up in-house management talent. It aims to successively transfer responsibility for the business unit to staff of the partner bank.
Upon completion of the long-term consultancy assignment, LFS remains available as an ad-hoc technical partner to client banks. LFS is prepared to provide follow-up training and IT services as required.
For information on downscaling projects of LFS, go to LFS project experience or select one of the countries below: