To get bank financing, SMEs must show the money

Small and medium enterprises (SMEs) should make sure their financial records are in tip-top shape before they approach banks for financing, representatives of an economic and financial development consultancy firm told business owners yesterday.

Some 50 entrepreneurs and small business owners yesterday attended the workshop at the Ministry of Industry and Primary Resources (MIPR) on how to qualify for bank loan and funding schemes.

The workshop was facilitated by Singapore-based economic and financial development centre Vector Scorecard Asia-Pacific (VSAPAC) Pte Ltd as part of a project initiated in April to help Brunei's SME owners.

During the workshop, Raden Azmi, managing director of VSAPAC Indonesia, said that the objective of the workshop was to share knowledge and educate SMEs on the importance of preparing all the necessary financial documents before approaching banks for financing.

"It is very important for SMEs to understand this importance. In our national survey initiated early this year, we felt that these are among the areas that need to be improved among SMEs in Brunei," he said.

He added, "We want to take this opportunity to guide SMEs on how to equip themselves before they approach the bank, so that they will no longer have the wrong perception when it comes to not qualifying for such loans and schemes from banks. They usually asked why ... banks cannot grant them loans, for example, maybe some components are missing there that they could actually work on in order to fulfil the requirements."

MH Nazzim, VSAPAC's executive vice-president for Asia-Pacific, during the workshop, said among the particulars that bankers always look for from SMEs, whether they are start-ups or long running businesses, are the business track record, collateral, six months bank statement, credit history of the company, credit standing of the business owner, background and strength of management, business plan and financial statements.

"So its really about preparing the SMEs, but also at the same time making it easier for the banks as well," said Azmi.

MIPR and VSAPAC signed a deal to help SMEs in April, including developing a competency-based assessment of Brunei businesses with a view of determining their readiness to venture abroad.

The study is expected to be completed in October.

VSAPAC has completed more than 500 external projects in more than 16 industry groups in areas including financial management, human resources development, entrepreneurial development programmes, analysis of industry skill and business requirements, industry development projects, programme evaluations and research into a range of national policy and practice issues.

According to a press release from the ministry, within the Bruneian context, the primary resources sectors (agriculture and agri-food, fisheries and eco-tourism), the Islamic financial market and the halal market among others have been identified as the key growth areas for Brunei SMEs which had been developed based on market recommendations for Brunei's future sustainability and growth.

The Brunei Times