HomeMMBIZ NewsADB to Help Banks Boost Risk Management Capacity for SME Lending

ADB to Help Banks Boost Risk Management Capacity for SME Lending

The Asian Development Bank (ADB) said it will help commercial banks in Myanmar raise their risk management capacity for lending to small and medium-sized enterprises (SMEs).

To further this aim, ADB and Myanmar Banks Association held a 4-day workshop last week.

The workshop covered key of credit risk management and operational risks in SME lending. Participating bank loan officers and risk managers discussed formulating credit policy, assessing loan applications, and monitoring loan portfolios more effectively.

“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.”

SMEs are the backbone of the private sector in Myanmar – accounting for over 90 percent of companies and over 70 percent 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 was organised 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.

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