De la formación en los servicios de Atención de Emergencias

It is accepted that SMEs are a major source of economic growth in many economies, but the manner in which their banking relationships are handled varies. According to Allen et al.

(2003), a primary pattern that has emerged over the past several years is that larger banks have been moving away from traditional relationship lending, and moving instead towards transactional lending:

Relationship lending—Old-style lending, where the customer relationship and local knowledge are key aspects.

Transactional lending—Focus upon assessing individual transactions, and the use of quan-titative assessment techniques such as credit scoring.

In effect, the type of credit evaluations being done has shifted directly from one end of the spectrum to the other. This has accelerated the growth of some banks, especially where mer-gers and acquisitions have been driven by the economies of scale that can be achieved from transactional lending. Meanwhile smaller banks, at least in the United States, remain focused

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upon lending into a niche market that values the relationships. Allen et al. (2003) quote:

(i) Feldman (1997), only 8 per cent of US banks with assets up to five billion dollars used credit scoring; and (ii) Treacy and Carey (2000), quantitative methods were used mostly on larger companies, while for SMEs, loan officers assessed qualitative factors in judgmental assess-ments. This probably has more to do with the nature of the lenders serving those markets than the markets themselves, and is changing fast.

6.2.1 Relationship lending

Old-style lending, being that based upon the five Cs, is called relationship lending. Risk is assessed by a loan officer or bank manager, who has personal knowledge of the client, his/her reputation, standing in the community, connections, current product holdings, history with the organisation, and so on. This is accompanied by a duty of secrecy, relating to any information obtained directly from the client.

According to Berger and Udell (2001), small businesses are more opaque, and thus have fewer financing opportunities than large companies—both in terms of bank credit and trade finance.

Those with strong banking relationships benefit from lower interest rates, reduced collateral requirements, lower reliance on trade debt, greater protection against the interest rate cycle, and increased credit availability. In an earlier study for the United States, they showed that the average SME banking relationship age was nine years, indicating that these relationships have some importance. Concerns were also expressed that:

• Any information that is gathered resides with the loan officer, and cannot be easily passed on to others within the organisation. It does not work well for larger, geographic-ally diversified banks, but this factor may be diminishing as technology improves.

• Relationship lending relies upon soft data about the firm, the owner, and the local com-munity, that is difficult to quantify, verify, and transmit within the organisation.

• Finally, the soft data also leads to an agency problem; the loan officer is contracting on behalf of the bank, but may not be able to communicate through layers of management, and further to shareholders. Agency problems are fewer with smaller lenders, which have flatter hierarchies, especially where the bank owner and president are one and the same.

Relationship lending also suffers from disadvantages related to: (i) less than optimal risk assessments; (ii) potential discrimination against minorities, especially where there is little competition; and (iii) unintentional cross-subsidisation of borrowers. Pricing is based largely upon the length and breadth of the relationship, and there is a tendency for new customers, and those with single-product holdings, to subsidise existing customers. Prices will reduce as the relationship matures, especially in more competitive markets. In the absence of competi-tion, banks are not only more likely to charge higher prices, but also take greater chances.

The problem with relationship lending is the cost, due to the time and effort required to culti-vate the relationship. Niche banks can use this as the basis for their competitive advantage, but their capacity for growth will be limited. In contrast, larger banks will focus upon efficiencies to lower costs, grow their loan book, and optimise capital utilisation. Even so, Bassett and Brady

(2000) reported that, over the period from 1985 to 2000, smaller banks enjoyed an interest mar-gin of 1 per cent higher than larger banks, and had a return on assets (ROA) that increased from 0.7 and 1.1 per cent, as opposed that for larger banks, which varied from 0.4 to 1.1 per cent.

This has combined with other factors to increase the larger banks’ motivation to move into the retail market. In particular, their base of easy money has been eroded, as depositors have gained access to capital markets. As a result, many of the larger banks have opted to focus their efforts on driving down costs, for loans in the middle and SME markets. This has had the benefit of not only growing the total debt market, but also providing lenders with increased portfolio diversification.

6.2.2 Transactional lending

According to Berger and Udell (2001), the primary difference between transactional lending and relationship lending is the ‘hard’ versus ‘soft’ nature of the data being used. Rather than relying upon information known only to the loan officer, transactional lending relies upon other technologies, especially credit scoring. While many lenders use transactional technolo-gies to the exclusion of relationship lending, they can also complement each other.

The problem with lending in the lower end of the market is two-fold. First, obligors’ size and transparency are correlated—the smaller the company, the more opaque. Financial statements are often not worth the paper that they are printed on, and collateral is often worthless in the event of default. Banks have had to capitalise on data sources that are readily available and trustworthy, and focus on unsecured lending. Second, there are fixed costs associated with service delivery, which makes lending more expensive. Hence, the need for the focus on costs, and the large amounts invested in decision automation and delivery infrastructures. Thus, transactional lending has provided a key to the SME market for larger lenders, who use credit scoring to evaluate borrowers’ payment histories, both internally and with the credit bureaux.

As Allen et al. (2003:19) explain it, rather than focussing upon individual loans, lenders instead rely upon the diversification provided by a large portfolio of small loans.

Allen et al. (2003:18) refer to the credit scoring models used for transactional lending as

‘portfolio risk measurement tools’, even though they are used to assess the values of indi-vidual loans, and not the portfolio as a whole.

Credit scoring in the small-business market really only started in 1995, with the introduction of a Fair Isaac (FI) model, which was restricted to loan values under $250,000 (Berger and Udell 2001). Two of the most widely used products in the United States are FI’s Small Business Scoring System (SBSS), and SMELoan, which originated in Hong Kong. The FI development identified some of the key factors as: SME, time in business and total assets; and personal, age, number of dependents, and time at address. The development also confirmed what lenders already knew—that information on the individual is more important than that for the enter-prise. In contrast, the SMELoan model focused exclusively on the firm. Lenders need only

‘collect data on sales, cash flow, and accounts receivable’, and combine it with the transaction history, to identify problem accounts.

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Lenders’ own dealings with each SME customer can also be assessed. For banks, the cheque accounts are especially information rich, as practically all transactions pass through them, and can provide an extremely strong indication of the SME’s short-term health. Data relating to the principals is particularly powerful, but privacy legislation may restrict what personal bureau data may be used for assessing an enterprise. Without appropriate consents, it may be limited to principals’ negative data only. For smaller juristics, lenders will insist not only upon personal suretyships, but also permissions to do bureau searches for payment performance elsewhere.

Impact on the market

Credit scoring’s impact on the SME market has been significant. Less face-to-face contact and documentation are required, as lenders instead focus on the wealth of readily-available hard data. Significant productivity gains have been achieved, with borrowers benefiting from improved access and increased choice, while lenders have increased volumes and reach. This results in greater economies of scale, increased geographical diversification, and greater com-petition. It is dependent upon credit information being readily available via the credit bureaux, where the United States has the lead.

According to Longenecker et al. (1997), the Hibernia Corporation implemented credit scoring in 1993. By 1995, they had already increased their throughput from 100 applica-tions per month to 1,100, and grew their loan book from $100 to $600 million, with reduced bad debts. Cited in Allen et al. (2003:20).

With regard to pricing, there is a correlation between borrowers’ credit scores, and the inter-est rates that they are charged. Many lenders use risk-based pricing, but this is not always the case. Prices for individual products may be fixed, but borrowers that are declined on one product may be accepted on another that is more expensive, and/or has stricter terms.

Allen et al. (2003) note that much greater price differentiation can be achieved with transactional lending. With relationship lending, there are ‘concerns about objectivity and consistency’.

One of the fears about decision automation is that it will eventually lead to further consolida-tion within the banking industry, reduced competiconsolida-tion, and higher prices. Experience thus far does not reflect this though. Allen et al. (2003:25) note several studies on the topic:

(i) SMEs have enjoyed greater access to credit where consolidation has been greatest, pos-sibly because the larger banks are better at diversification (Black and Strahan 2002).

(ii) Small-business loans that are displaced during the consolidation process are then picked up by other lenders (Berger et al. 1998).

(iii) The interest rates offered by larger banks are lower (Berger et al. 2001), and there is less cross-subsidisation of established borrowers by new borrowers.

(iv) At worst, bank mergers have had little impact upon the availability or cost of credit (Scott and Dunkelberg 1999).

While credit scoring can provide benefits to almost any bank, there is often a reluctance to move from relationship to transactional lending. Smaller banks in particular believe that their competitive advantage lies in personal service. They may, however, underestimate the appeal of Wal-Mart style prices and convenience.