A good fellow. Why banks began to lend to small firms
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The financial crisis of 2014-2016 forced bankers to fundamentally reconsider their attitude to small and medium-sized businesses (SMEs). Small companies, always in the shadow of large corporate borrowers, are increasingly attracting the attention of Ukrainian banks. They have relatively clean balances and a good credit history. The largest Ukrainian corporations, on the contrary, are overloaded with foreign currency obligations and experience enormous difficulties in servicing loans, and often even shy away from payments through courts or bankruptcy.
"The segment of SMEs was not spoiled by the attention of banks that traditionally relied on large customers who could significantly increase their portfolio at one stroke, and the profitability per client is significantly lower than in a large corporate business," explains Ukrsotsbank CEO Tamara Savoschenko. Free funds went to high-margin lending to natural persons, the banker adds. But the solvency of the latter after the threefold devaluation of the hryvnia is lame, and the opportunities to quickly restore the pre-crisis level of incomes are far from everyone's.
The loan portfolio of the Ukrainian banking system reaches 996 billion USD, according to the National Bank for February 2017. At the same time, reserves for active operations of banks exceed UAH 486 billion. The lion's share is reserved for loans of the largest corporations. The bankers are afraid of expanding their lending. But somehow free funds need to be sent to active operations. In addition, many banks at the request of the NBU need to reduce the share of insider loans for related persons. The competition for small entrepreneurs in this regard is only growing. LIGA.net found out how Ukrainian banks are plunged into the SME segment.The pace was increased
SMEs in the understanding of different banks are companies with an annual turnover of up to 500 million UAH. Some financial institutions consider the highest bar, others have a ceiling of 100-200 million UAH. The scale of lending in absolute terms of SMEs is still small, but the dynamics of growth is amazing. For example, the portfolio of Ukrgasbank has doubled - to UAH 1.1 billion, and Kredobank - by 20%, to UAH 1 billion. FUIB also reported doubling of SME loans, and in Ukrsibbank - about a 1.5-fold increase. The trend, set last year, continues in this. The loan portfolio of SMEs Piraeus Bank only grew by 50% in the first two months compared to the beginning of the year.
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What credit products do bankers offer to small entrepreneurs? Basically, these are loans to support current activities. According to the press service of Oschadbank, 60% of the SME portfolio in this financial institution - loans for replenishment of working capital (rate from 18.75%), 15% - for the purchase of vehicles and equipment (rates from 12% for partner programs and from 20 % On standard), 10% - investment loans (rates from 20%), 4% - overdrafts (rates from 17.5%), 11% - other loans.
"Loans for replenishment of current assets, which the bank usually issues for two years, as well as investment loans for the purchase of equipment, agricultural machinery, vehicles and real estate, repair and construction work are in great demand." These loans are issued for a period of 5-7 years, " According to the financial institution, loans in hryvnia are most in demand, however, every tenth borrower is interested in loans in dollars, euros and Polish zlotys.
A similar situation in other financial institutions. Ukrsibbank also dominates loans to replenish working capital - about 70% in the portfolio of SMEs.
"Investment loans are issued a little. On the one hand, banks are not ready for long investments, on the other - the client can not always provide an investment project, under which the bank is ready to allocate financing. And interest rates on investment loans are not entirely available for business, "Savoshchenko explains.
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The high cost of credit resources is one of the main obstacles to more active SME lending. However, the situation is now much more favorable than in 2015, when the discount rate of the NBU reached 30%, which virtually eliminated the expansion of loan portfolios of banks. Today, the National Bank's discount rate is 14%, and some banks approximate the cost of loans to this level. UkrSibbank claims that their minimum interest rate for SMEs is already 13.9%, while in Kredobank it is declared at 16.9%.
There are other obstacles to the development of investment lending.
"The regulatory base of the National Bank and GFS does not allow banks to make a grace period for investment projects (a free crediting period - Ed.). And without this, it is difficult to develop investment and project lending. An example from our practice: even if you have land, then you need to collect solar cells on it, connect to the network, "- adds the head of the board of Ukrgasbank Kirill Shevchenko. That is, short loans will still prevail this year.
glad to see
The general requirements for SMEs among bankers differ little. "This is an impeccable business reputation and credit history, the availability of liquid collateral, if a secured loan is issued or good current account turnover, if a blank overdraft is issued, a good financial condition," says Pivdennyi, the director of the SME department of the bank Nina Taranenko. In addition, banks pay attention to the transparency of ownership structure and experience in the market, which should not be less than two years.
Clearly expressed in bankers and industry preferences. In favorites - retailers with a high turnover of funds, manufacturers of consumer goods, pharmacists, as well as well-feeling in the crisis of the agrarians. For example, in Kredobank they say that every third loan is given to agricultural producers. Farmers can often rely on more favorable credit terms. Many banks make special programs for them, lending to purchase equipment and equipment at reduced interest rates.
"We have a rural development program in conjunction with the German-Ukrainian Fund and lending under the agreement with the Republic of Belarus, under the terms of which its government compensates part of our client's interest rate. Tractors, combines and other equipment of Belarusian production can be purchased at 12% per annum, "- said in Ukrgazbank. In the financial institution also rely on lending to alternative energy projects - eco credits in its portfolio of SMEs account for 42%.
Credits are a key, but not the only product that banks compete for SMEs. As noted in FUIB, entrepreneurs consider cash management, acquiring, currency purchase and sale operations as well as salary and card projects and corporate payment cards important factors in choosing a bank. A more specific need for SMEs is securities transactions and depository services.
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"In the sphere of documentary business, the most demanded operations are the issuance of tender guarantees, which we carry out for 1 day, as well as the avalanche of bills for agroplants to purchase seed, plant protection products and fertilizers. The operation for the avalization of bills allows the client to attract working capital at a price 6 times lower than the price of the loan, "says Svetlana Niskklon, director of the Piraeus Bank SME.
However, bankers do not strictly bind to this or that sector. Enterprises with good balance and stable cash flow are in demand regardless of the scope of their activities. Especially with a good credit history. As Nina Taranenko of Pivdennyi Bank notes, financial institutions can treat clients both in relation to the sectoral sign, and according to behavioral criteria. Most of the LIGA.net surveyed bankers in 2017 are going to increase the loan portfolios of SMEs by an average of another 50%.
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