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CTPL

Putting the G20 Global Framework on SME Finance into Practice: Prospects for Canada-Caribbean Collaboration. Jeremy Pallant Vice-President, Emerging Retail, Micro-Finance & Small business International Banking, Scotiabank. CTPL. SMALL BUSINESS -- A Key Target Segment.

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  1. Putting the G20 Global Framework on SME Finance into Practice: Prospects for Canada-Caribbean Collaboration Jeremy Pallant Vice-President, Emerging Retail, Micro-Finance & Small business International Banking, Scotiabank CTPL

  2. SMALL BUSINESS -- A Key Target Segment Small Business Customers & Professionals Business Personal Annual Sales / Deposit Activity Affluent Corporate Up-to US$ 4 MM* Commercial Mid Market where we operate a Micro-Finance Business-Line, companies with sales below USD 100M deemed Micro-Finance Small Business Emerging Retail LUC-eligible / scoreable Loans Borrowing Micro-Finance LUC-eligible Exposure: US$ 500M Term Loan $500M Revolving $250M Over LUC Limits via 1035 & referral to local Commercial Credit Risk Committee Tier 2 LUC-eligible Basic Credit Bureau + Strong Score Capacity: i.e. T&T, CR, Panama, Jam. Exposure: US$ 400M Term Loan $400M Revolving $150M Tier 3 LUC-eligible No Credit Bureau & Limited Scoring: Exposure: US$ 150M Term Loan $150M Revolving $50M Professionals: defined as self-employed or owner/operators Tier 1 LUC-eligible: Rich Credit Bureau / Scores: i.e. MPC, ES, PR, DR, USVI (*) May vary somewhat by country

  3. Focus on the Owner: Small Business – branch-based relationship management but centralized underwriting, always with the owner’s personal pledge • Asset-based lending (STRs), when certain eligibility criteria met (owner has good personal credit score and company meets minimum performance criteria). • Acceptable security class depends on formality & score of client. • There are limitations for start-ups outside of selected professions and sectors. Micro-Finance – decentralized relationship management & underwriting but centralized control, always with the owner’s personal pledge • Mostly unsecured lending as small loan sizes make security registration & eventual foreclosure uneconomic. • Delegated lending limits linked to variable compensation based on portfolio quality and production. • Credit criteria, quality assurance and lending limits managed centrally.

  4. Small Business: Integrated & Automated Lending Life Cycle Application • Starting point is contact program for Small Business executives • Loan application input into automated workflow platform • Centralized adjudication centre • Decision primarily based on owner’s scoring & servicing capacity • Efficient, effective – 24 hour SLA, low appeal rates • Established exception parameters • Receives applications and imaged supporting documents • Approves deals – automated notification to SB Banker Underwriting / Adjudication Documentation • Doc Centre prepares documents; reviews completed documents; registers documents -- an area of weakness in Latam & Caribbean Monitoring & Reviews • Monthly automated monitoring Credit Review system • Centralized completion of periodic credit reviews for Small Business based on pre-set triggers Collections • Conducted centrally through Special Accounts Centre • Branches not responsible for work-outs of at-risk accounts Servicing • In-branch servicing model • Small Business Contact Centre Unit to assist in post-sales service • Cash Management Contact Centre

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