New Banking Software to Make Life Easy for SMEs Worldwide

In a recent press release by the International Trade Centre (ITC), the export development agency of the WTO and the UN, has informed that it had launched a software to assess the credit worthiness of loan applicants from exporting SMEs without relying solely on their financial collaterals. The software named as LoanCom or “Loan for Competence” has been jointly developed by Export Import Bank of India and the United Nations Office in Geneva (UNOG).

The software is understood to facilitate the banks or any financial institution to manage their lending practices based on the success potential and the future wealth of the enterprise, which perhaps has no adequate financial background. LoanCom is expected to radically change the traditional lending practices that are integrated with the competency of the enterprise and the conventional credit risk assessment criteria.

The core aim of the project is to make available loans for the competent SMEs which struggle to succeed particularly due to lack of funds. LoanCom has applied non-technical language to be easily adapted and understood by applicants and loan officers from varied backgrounds, and it is also compatible with international banking practices.

A customised pilot version is already in use in India, and another application was developed for Tunisia’s Bank for Small and Medium Enterprises (BFPME). Similar upgrades are planned in the Democratic Republic of the Congo and Cambodia, and discussions are also taking place with Kenya, Mali, Mongolia, Samoa, Jamaica and El Salvador.

The banking tool is set to eliminate major financial barriers especially for small exporting entities to avail loan at their competencies alone rather than any financial collateral. ITC Executive Director Patricia R. Francis stated that “With its mandate to assist developing and emerging countries’ exporters, ITC recognizes the plight confronting SMEs and has initiated a number of practical initiatives designed to bridge the knowledge gap often present between SMEs and financial institutions”.

By Jose Roy