Page 12 - NIBAF-Training Matters January - June 2023

Development

Finance Programs

SBP has introduced several initiatives in recognition of the importance of expanding the outreach of financial
services to different economic segments. The Government of Pakistan and SBP are both working towards creating
an enabling environment through implementing conducive policies and launching capacity enhancement drives
for financial institutions which in the long run would lead to the inclusive growth and development of the economy.
NIBAF, in coordination with the Financial Inclusion Group, supports SBP in developing and launching capacity
building initiatives in the areas of Agriculture, SME, Microfinance, Infrastructure and Housing sectors. These initia-
tives both support banking professionals develop expertise to cater to the financial services needs in different
sectors while also creating awareness about SBP policies in these priority sectors to sensitize stakeholders and
expand the outreach of financial services.

NIBAF continued its training momentum through holding various online and face-to-face training programs over
the period. These programs focused on developing sector-specific expertise to perform sectoral analysis and create
lending opportunities, conduct technical and financial to develop appropriate financial products and create lending
opportunities for lower segments of the economy. NIBAF offered a number of programs for commercial banks
officers besides creating awareness among university students, services providers, manufacturers and businesses.
Experienced bankers, professionals and subject specialists were engaged to conduct interactive programs with the
help of engaging presentations, debates and discussions on core issues in respective sectors, group/ individual
exercises and case studies etc. A brief overview of programs conducted in H2FY23 in the different areas is given
below:

SME Programs
NIBAF organized eighteen programs
over the period for different stake-
holders including banks, SMEs and
academia.

Bankers need good analytical skills
to assess customer’s ability &
willingness to repay prior to
disbursing a loan. Such an assess-
ment requires a coherent under-
standing of financials using differ-
ent techniques which is more
significant in case of extending
finance to small enterprises who
generally have inadequate financial
records which warrants adopting
creative financial analysis non-financial advisory services etc. to extend liquidity to important
tecniques. NIBAF conducted four NIBAF also conducted two training value chain agents with mitigated
programs for Relationship Manag- programs on Value Chain Financ- risk and improved credit assess-
ers and Branch Managers on SME ing-Opportunities in SME Banking. ment of the borrower and the
banking to develop their credit This training provided valuable improvement in credit and
assessment skills related to SME insights to participants on the payment risk with shifting the focus
lending. Other important aspects concept, products and business from bi-party (FI-SME) relationship
discussed during the training models under Supply Chain Financ- to a tri-party (FI-anchor-SME/Agri)
included identifying potential ing(SCF). It also imparted knowl- relationship that leverages the
clients and understanding their edge on SCF assessment and its trade and payment relationship
financing needs, performing credit related risk profiling, leveraging between larger anchor and
evaluation of SME customers, prac- technological innovation and Agri/SME supplier/distributor.
tice session on cash flow analysis, advancement. The trainer also
key considerations in approving discussed significance of techno- New product development and
SME loans/credit lines, provision of logical integration in the VCF model process innovations are key aspects

12 Training Matters | January-June 2023

for the growth and sustainability of asm in entrepreneurship ideas strategies and policies. Under the financing. This requires thorough ment Information System (LRMIS), er perspective and how an existing Training Programs on Housing
any business and banking business shared by the trainer and asked Environmental and Social Risk understanding of agri sector and types of charges, personal guaran- customer of bank can be made Finance
is not an exception. There is a need relevant questions related to differ- Management(ESRM) framework, various measures taken by SBP. tees etc. Mr. Adnan Adil, Head Legal, effective by informing him to utilize
to enhance human capacity by ent business ideas, their commer- financial institutions identify E&S EXIM Bank conducted three itera- different modes of easy financing. Housing sector holds its prominence
imparting skills and techniques cialization prospects and seeking risks associated with their clients or NIBAF in collaboration with SBP tions of this programs while Mr. Another special program on Islamic in the economy due to its sizeable
that would help the banking financial support from banks. More investees to minimize the potential has initiated an extensive capacity Nasir Jamil, Area Head, CAD, Bank Agri finance was conducted at portion of production activity,
business tap-in potentials clients by than four hundred students from impacts from such exposure on development program for banks to Alfalah Ltd conducted two itera- Lahore by Mr. Saqib Imran, Head of linkages to land markets, materials,
developing products with peculiar commerce, finance and marketing their lending and investment promote understanding of financ- tions. Both trainers are seasoned Agri banking, Albaraka Bank Limit- tools, durable goods, labor and
features that factor-in the client departments of the two universities portfolios. This reduces the financial ing requirements of the agriculture bankers with over 30 years’ experi- ed. Mr. Saqib has over 25 years of financial markets and hence is a
needs. Keeping in view this import- attended these programs. institutions’ financial liability and sector, equip banks with necessary ence in commercial bank lending. experience in the Agri Finance priority sector warranting focused
ant feature, NIBAF designed a reputational risks arising from E&S tools and techniques for serving the Sector. He explained the topic from efforts for economic uplift. Demand
customized training program on NIBAF also organized a series of issues amid a tightening regulatory subject priority sector more effec- NIBAF conducted three programs the perspective of Islamic Banking of housing units is also burgeoning
Product Development & one-day awareness programs for environment. In addition to tively and efficiently and to extend on Remedial Management in Ideology and shared details of utiliz- yet the sector remains highly
Program-based Lending. An SMEs & banks at Sialkot, Faisalabad, improved management of E&S financing under the SBP conces- Agri-finance during this period at ing shariah compliant modes under-developed and untapped
important part of this program is Rawalpindi, Attock and Chakwal. risks, financial institutions can also sionary finance schemes. Lahore and Multan. Mr. Muhammad including Ijarah and Musharka. The primarily due to lack of mortgage
the discussion on bank business These programs were attended by seize a growing cluster of sustain- Yahya, Head Agri Business, Bank participants asked different ques- products and banks’ financing
models, assessing product feasibili- participants from Chamber of Com- ability business opportunities such During H2FY23, NIBAF organized Alfalah Ltd and Mr. Sarfraz Hussain, tions regarding customer percep- structures besides slack in relevant
ty and hands-on product develop- merce & Industry, Women Cham- as renewable energy and carbon In view of the agreed benefits and Bhd conducted the training and five online programs on Credit Risk Head Business, Bank of Punjab tion for extending Islamic Agri skills and conducive environment.
ment exercises and successful ber of Commerce & Industry, SMEs finance, outperform their competi- in compliance to the global recog- discussed SBP ESRM Manual & its & Security Documentation for conducted the sessions. Both train- Finance.
cases. The program content also including service providers, manu- tors, and attract new capital. nition of ESRM, SBP also issued Implementation, Environmental & agri-officers of banks. The objec- ers have over 28 years of experience In order to develop banks capacity
includes understanding potential facturers and entrepreneurs. NIBAF guidelines on Green Banking in Social Due Diligence (ESDD) procedures tives of this program is to develop in Agri banking. The objective of Two programs were conducted on in the area of mortgage products,
NIBAF conducted five online training
SMEs & their borrowing needs, engaged trainers from SBP, SBP 2017 and a detailed Environmental & processes, Overview of IFC Perfor- understanding of banks’ officials this course is to highlight the signif- Agri Business Risk and Lending programs on housing finance.
elements of program based lend- BSC, SMEDA, BOP and Faysal bank and Social Risk Management mance Standards and Other Inter- regarding credit risk, need of securi- icance of credit monitoring and to Techniques at Sahiwal and Baha- These courses highlight the importance
ing & relationship lending, issues & to share key insights on refinance Implementation Manual (ESRM) in national Standards, Post Transaction tization in agri-lending, legal recognize & evaluate problem loans. walnagar where more than 50 of housing sector, scope of housing
challenges and the processes schemes, SME policies, banking November 2022. Monitoring, ESDD Checklist Exercise concepts of various assets & under- The program also includes discus- participants from different adjoin- financing in Pakistan, concepts of
involved in booking SME loans. products available under Islamic and related Case Studies. So far, lying securities, significance and sion on the causes of default, its ing areas participated. This house mortgages & its types, risk
and conventional modes, financing In order to develop related capacity almost 200 banking officials work- legal aspects of documentation. impact on overall loaning portfolio, program covered different aspect assessment & mitigations, collateral
SBP has launched various refinance procedures & processes. The speak- of banking industry, NIBAF has ing in project finance, corporate, Credit underwriting requires good type of risks & their evaluations in of Agri Finance including risk iden- & security documentation, comparison
schemes to extend concessionary ers discussed and highlighted main been working in collaboration with risk, CAD and Green Banking analytical skills to determine terms of obligors, size and pricing of tification, risk mitigation measured of home loan vs mortgages, marketing
credit besides implementing an features of various subsidized and International Finance Corporation division have been trained under borrower capacity and willingness the loan. Understanding of early for farm/non-farm cedit, sales tech- & sale techniques, challenges &
enabling regulatory framework to credit guarantee schemes specifi- (IFC) to leverage the organization’s the program. to pay; credit officers are required to warning signal, underlying security, niques for attracting farmers and opportunities and SBP regulations.
support growth of SME credit. cally designed by the SBP for SMEs. global knowledge and expertise in thoroughly analyze borrower’s collateral & various guarantees, overview of SBP low cost and regu- Syed Raheel Rizvi, Head of Housing
NIBAF organized four trainings on More than 500 participant attended sustainable finance to support local Training Programs on credit history, visit borrower’s evaluation of repayment flows are lar loan schemes. One of the main Finance, Bank AL Habib along and
SME Regulatory Framework and these programs banks improve their E&S practices, Agri-financing place/business, vet documents to also covered in the program. The aspects of this program is a knowl- Mr. Wasif Hussain, Joint Director, SME,
Refinance Schemes to enhance with a focus on ESRM. NIBAF has establish title genuineness, evalu- participants took active participa- edge sharing session with field Housing & Sustainable Finance
participants’ understanding TOT Programs on Sustainable launched a Training of Trainers Agriculture is an important sector ate loan-size & its purpose, deter- tion in the training program and experts wherein progressive farm- Department conducted these trainings
regarding prudential regulations Banking (TOT) program on ESRM to familiarize of the economy. It contributes mine loan price and duration etc. got clarity on risk assessment and ers, Agri product innovator, farm and shared their views on housing
for SME financing and features of banks with ESRM practices that are significantly towards the national The officials are also expected to remedial management. machine modernization consul- finance risks and deliberated on
SBP’s subsidized refinance & credit Sustainable financing is gaining compliant with the Green Banking income, provides employment have a clear understanding of types tants, cattle farmers etc. are invited current housing finance schemes &
guarantee schemes. The partici- more traction around the globe Guidelines (GBGs), IFC Performance opportunities to a sizeable work- of assets/properties, their nature A special program on Agri Finance to share their experience of farming regulatory direction. During these
pants took keen interest in these with investors increasingly demanding Standards, and other Pakistan force and ensures food security for and characteristics, legal attributes was conducted at Sukkur for during the session. Mr. Yahya sessions, discussion was also held
programs by asking questions on environment friendly products regulations. Through this capaci- the masses. Increased demand of and legal entitlement to constitute enhancing the capacity of commer- Hameed, Head of Agri Business, on earlier Government Low-cost
different aspects of SBP schemes across all industries. The financial ty-building training, participants agri-produce and availability of security/collateral. This training cial bankers from Baluchistan and Bank Alfalah Ltd conducted both Housing Schemes and banking
and clarification on various PRs. The industry, under guidance and drive learn to develop an Environmental innovative farming techniques is program is designed to provide a Sindh. The two day program was the programs and shared his exper- products on housing finance to
trainers explained the importance from the financial sector supervi- and Social Management System creating lucrative opportunities for comprehensive understanding of specially designed to promote Agri tise using examples from his own highlight the importance of the
of these schemes, their key features sors, is also considering Environ- (ESMS) that places significant the banks to tap potential of this credit risk, documents required for finance in province of Baluchistan experiences in agri credit product sector and effects of discontinua-
and business potential for banks. mental, Social, and Governance emphasis on a bank’s E&S policy segment and direct agri credit to loan disbursement, assessment of and Sindh. The lead trainer of the development and lending. tion of subsidy scheme.
(ESG) aspects while devising their and capacity as well as procedures innovative borrowers. SBP is also revenue documents, related Acts, program was from HBL while
Two awareness programs on entre- for identifying, assessing, manag- taking various initiatives and mea- Articles & Clauses, passbook & its senior officers from Agri finance
preneurship skill development ing, monitoring, and reporting E&S sures to promote agriculture attributes, Land Record Manage- departments of other banks also
were conducted at Punjab Universi- risks and performing the Environ- participated to share their experi-
ty, Lahore and Shaheed Benazir mental and Social Due Diligence ences. Mr. Azam, JD ,AC&FID also
Bhutto Women University, Pesha- (ESDD), which encompasses identi- shed light on significance and
war. These sessions focused on fication and assessment of a importance of Agri finance and also
providing an overview of SBP project’s E&S risks as well as share key features of the different
schemes to promote SME financ- proposed mitigation measures in Agri schemes that can utilized for
ing, global and local entrepreneur- the form of an environmental and low cost mechanism and hence
ship business strategies and social action plan. promotion of the Agri Sector.
success stories and the role and
importance of National Incubation NIBAF conducted an iteration of A program on Agri Value Chain was
Centers as a platform for students the ToT from June 19-20, 2023 at conducted at Hyderabad. Mr.
to discuss and polish innovative NIBAF-Lahore. Dr. Afifa Raihana, Shahrukh, Head Agri, Bank Islami
ideas and further steer them towards Senior Environmental Specialist, Pakistan Ltd conducted the train-
establishing viable businesses. The IFC and Desiree Nathan, Managing ing and explained agri financing
participants showed great enthusi- Partner, EeHSSE Consulting Sdn from grower perspective to produc-