Kathmandu - The third day of the 36th Asian Credit Support and Innovation Conference (ACSIC) concluded today with five dynamic sessions. The third day discussions highlighted the essential role of credit guarantee institutions in supporting micro, small, and medium enterprises (MSMEs) across Asia.
In the morning session, Deputy
Governor Bam Bahadur Mishra emphasized the challenges facing MSMEs and the importance of credit guarantees. “In the
current context, where MSMEs are facing numerous constraints, credit guarantee institutions are crucial in
bridging the gap between the demand and supply of credit,” he stated. Mishra
urged these institutions to collaborate
closely with central banks to promote sustainable growth across all sectors.
Meanwhile a panelists Nur
Syamsudadi of Asippindo (Indonesia) and Hatano from the Japanese Federation of
Credit Guarantee stated that Indonesia’s government initiatives aimed at
enhancing financial literacy among SMEs, with a goal for 80% of them to achieve
creditworthiness. Hatano noted the ongoing challenge of raising awareness about
digitalization, which can significantly improve operational efficiency.
The keynote speakers reflected on
the history of credit guarantees in Nepal, noting that the Deposit and Credit
Guarantee Fund (DCGF) has played a pivotal role since its establishment in
1974. The session reaffirmed Nepal Rastra Bank’s commitment to ensuring that
15% of total bank credit is allocated to MSMEs, particularly in agriculture and
youth entrepreneurship.
The afternoon session shifted
focus to best practices in Asian innovation financing. Discussions centered
around innovative approaches such as the KODIT AI-powered BASA system, which
helps SMEs assess their creditworthiness through real-time diagnostics. TCG’s
AI- driven financial services facilitated significant growth in SME lending
during the pandemic, aiding in economic recovery. Additionally, PHILGUARANTEE's
support for diverse industries, including tourism and energy, was highlighted
as a means to foster economic stability.
Richa Chaudhary, Manager at
CGTMSE, remarked, “These loans act as a
lifeline for small enterprises and allow creativity and innovations to come
into existence.” The coverage ratios under CGTMSE’s schemes can reach up to
85%, providing crucial financial support for MSEs. Mandira Thapaliya, Head of
DCGF, shared that the fund has supported over 1.4 million borrowers with a
total guarantee amount of $1.7 billion, including innovative schemes designed
for startups.
The session 7 was focused on
pricing strategy that plays a vital role in financing innovation, managing
risks and generating revenue for a project itself and the banks that offer
guarantees. The panelists discussed about the pricing model that should be
designed on the basis of possible risk factors in any business so that it can
support the growth of the project as well as investors.
Anish Tamrakar, Chief Digital
Banking Officer of Kumari Bank, stated that maintaining balance between the
viability of the projects and pricing modality is getting more challenging in
current market.
Meanwhile on Round Table
Discussion titled "Charting the Course: Managing Risks in Financing Innovation,
Strategies and Insights" focused on financing innovation business pose
high risks which is high during the time of economic slowdowns and other types
of natural disasters and pandemics.
Japanese and Korean Credit
Guarantee institutions shared that they are implementing comprehensive
data-based and quantitative modeling method to analyze the potential risk
associated to the innovation and startup financing. In response to the high
risk associated to the startup financing by Japan Finance Corporation (JFC)
shared that it is adopting three models - sharing risks with financial
institutions, venture Debt schemes with innovative business and specialized
teams for innovative Businesses.
KOREG of Korea as Central
Government level credit re-guarantee service provider, it provides service to
various 17 credit guarantee foundations under local governments. It also
conducts education and training programmes as well as works to devise credit
guarantee scheme.
As the part of KOTEC (Korea
Regional Credit Guarantee Foundation), Mr. Yosep Kim shared proactive of Korea
in providing financial supports to Technology Innovative SMES. He informed that
KOTEC as an institution to support only technology rating system it focuses on
technology rating rather than credit rating. KOTEC is using various measures
for pre-Risk management (fraud) and Post-Risk Management (Default) while
providing service to technology startups.
The day was ended with a session
titled "Designing Sustainable Guarantee Programs Amidst
Uncertainties". The session was moderated by Prof. Dr. Suresh Manandhar,
CEO of Wiseyak, and Koseph Silvanus, MD of Dolma Consultancy. The focus was on
enhancing sustainability within credit guarantee programs amid evolving
challenges. The moderators discussed included the importance of integrating
sustainability into guarantee programs using AI tools. Presenters explored
real-world scenarios and highlighted the dual challenges and benefits of AI
implementation, emphasizing its role in transforming scanned images into structured
data for improved decision-making.
The moderators outlined essential
elements for effective implementation, such as data warehousing,
standardization, and leveraging human capital in AI, machine learning, and
actuarial science. They underscored that AI systems differ significantly from
traditional software, urging participants to embrace AI tools for greater
organizational efficiency.
Koseph Silvanus pointed out the
significance of both lead and lag indicators in business, along with the
necessity of statistical models for credit scoring and customer segmentation.
He identified eight key challenges organizations face when adopting AI,
including the need for faster decision-making, portfolio monitoring, and
enhanced customer experience.
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