USAID/SABEQ and ABJ tackle the issues of problem loan management and commercial Banks

Working to overcome the risks associated with the loan business is of considerable concern for commercial banks, and banks in Jordan are no different when it comes to resolving issues related to loans.

The workshop centered on demonstrating that resolving problem loans is a function of understanding the dimension and costs involved for banks; using a suitable organizational structure; assigning appropriate resources; and employing successful strategies for collection.

The workshop facilitators, both experts in lending to small and medium-sized enterprises (SMEs) also emphasized that an important by-product of managing problem loans is discovering "lessons learned" and applying them to the loan process. In this way banks can better mitigate risks that are inherent in the loan process.

The objectives of the first day enabled participants to analyze the reasons for problem loans, select the approaches of working with problem loans, identify or predict problems in this area, employ strategies for recovery, and analyze the reasons for workouts during the cash and product cycle. The objectives of the second day of the workshop were even more practical: the participants reviewed, analyzed and discussed actual cases of problem loans from non-western countries.

The two-day workshop targeted banking managers responsible for collecting problem loan portfolios and managers of performing loan portfolios. The total number of attendees for the workshop was 27 representing 13 commercial banks.

The USAID-funded Sustainable Achievement of Business Expansion and Quality Program (SABEQ) is a five year broad economic development initiative implemented by BearingPoint, Inc. and a sizeable team of international and Jordanian partner firms. By both supporting improvements in the business environment and providing assistance to expand innovation and productivity in Jordanian businesses, to support the main objective of building up the private sector as a powerful engine of economic growth.