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Oschadbank: developing the internal capacity for lending to MSMEs

Between July 2019 and December 2020, AFC, in cooperation with the SME Banking Club from Ukraine, assisted Oschadbank in developing the necessary internal capacity and adjusting the processes for the provision of efficient lending services to eligible MSMEs.

This process is part of the European Bank for Reconstruction and Development’s (EBRD) “Reform of state-owned banks strategy” programme, with Oschadbank being the only state-owned universal bank in Ukraine, having the largest network of branch offices across the country.

SME Banking Club formed a team of 4 experts (including project manager) and supported the experts with analytical and product reports.

Despites the pandemic, which affected the operational activity of Oschadbank for a long period of time, AFC’s team was able to work closely with the key bank’s stakeholders, in direct contact with the top management and board of directors of the bank. The team was able to successfully develop the new strategy for MSME lending, including a refreshed MSME market segmentation, aimed at identifying the priority for the bank segments and to assess their market potential. As part of this very important first step, the team identified the gaps in the existing range of the bank’s products and services, as well as in the related operational processes.

This new strategy allowed the bank to develop:

  • an optimized and more profitable product portfolio concept, as well as marketing and cross-selling strategies, including risk-based pricing;
  • a simplified and more efficient credit scoring system;
  • a new service functional model for MSME lending, also providing support in its implementation;
  • an optimised electronic loan documentation processing and storage;
    a wider business process automation;
  • an improved soft collection and anti-fraud concept.

In addition, the expert team has proposed an optimized organizational structure that brought the regional competence centres to a new level, while making the lending process less bureaucratic and more time-saving.

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