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Importance of skill oriented bank lending

by Sudam Chandima Kaluarachchi, Union Bank of Colombo Ltd.

Everyday in the world, hundreds of people commit suicide due to various reasons. Sri Lanka has become one of the leading countries where a higher number of people commit suicide every year. Living anywhere in the world with human dignity is a human right and it has been assured by the Geneva Convention of human rights. "Credit is also a human right" of people living in the world irrespective of one's sex or Nationality.

How many of you do agree with that statement? The above statement has been made by Prof. Muhammad Yunus, the Managing Director of the Grameen Bank in bangladesh who introduced a new credit culture to the world which has been highly recognised and respected by the people all over the world.

Ability to be alive

According to Prof. Yunus, if somebody is alive, that itself is sufficient to prove that he or she has a skill. A person who has this basic skill might be living with many other unexposed or hidden skills which he or she will utilize one day if he or she is given a financial support for betterment of his or her life.

Prof. Yunus believes that every person has enormous skill and capacity.

His concept is about giving a chance to these comparatively less fortunate people who are not financially rich to prove themselves that they are skilled people.

In this matter, he believes, credit is the key to open out a person to explore his or her potential in front of the world.

This is equally important to be practiced in Sri Lanka as well and can be applied to businesses too. Today, with the globalisation, the business world had become very competitive.

Any business which survives while facing this severe competition itself proves that this business has a competitive edge and is strong enough to absorb some financial commitments and its directors are skilful.

The important matter here is upto what extent?

Loans and advances 

Commercial banks in Sri Lanka as of September year 2000 have disbursed Rs. 301.4b to various sectors in the economy which has been utilised for numerous purposes. The highest amount of funds has been absorbed by the Trading industry. That is 42% of the total loans and advances granted. Housing loans have placed second in the line by absorbing 13% of the total loans. The lowest percentage i.e. a little higher than 1% has been disbursed to the tourism industry which is expected to boost in near future due to the peace process going on.

Secured and unsecured

Loans and advances by type of security - Rs.Mn. (As of September 2000 (Source: Central Bank of Sri Lanka)

About 3.5% of the loans and advances have been granted against gilt-edged government securities. These loans of Rs. 10b have no credit risk at all. Over Rs. 35b worth of loans have been granted against various cash deposits, blue chip company shares, bonds and debentures. Though the share market, at present, is vulnerable it is expected to improve and grow with the economical and political stability. Ten percent of the loans and advances granted are cash backed and carry zero credit risk. These figures clearly show that commercial banks tend to avoid risk and maximise the profit by forgetting the main objective of lending. By disbursing Rs. 87.3b i.e. 28% of the total loans portfolio against immovable properties, commercial banks have shown their intention to keep immovable properties such as lands and buildings etc. as security irrespective of the cumbersome procedure to be followed when charging immovable properties as security.

This might be due to the appreciation of value of immovable properties with the time. The other side of the scenario is that the customer has to bear some massive duties imposed by the Government such as stamp duty, legal fees and registration fees. The loans and advances granted against the movable properties are totalling to Rs. 33b i.e. nearly 11% of the total loan portfolio. The banks can enjoy the advantages of these securities only if they take the proper documentation without any legal bars and register them as a compulsory procedure or to secure the priority against others.

Other securities like Agreement to mortgage, intangible collateral such as Personal Guarantees and Indemnities, joint and several Corporate Guarantees, Promissory Notes and Trust Receipts have been also utilized by banks to secure the loans and advances granted by them. Anyway these are almost unsecured loans and advances. In addition to them, commercial banks have granted Rs. 42.6b worth of loans and advances in clean basis where banks are totally exposed. The repayment rate of these loans and advances totally depends on the proper identification of the borrower, quality of the credit evaluation, character, integrity and repayment capacity of the borrower. The total of Rs. 140b i.e. 46.5% of loans and advances are almost unsecured.

Skill vs security

It is questionable that whether skillful people with good character and high degree of integrity should provide any asset to secure their financial commitments. On the other hand the question arises that if any unfortunate event occurs how the bank can recover the outstanding if the loan is unsecured.

The answer is simple. Anywhere in the world some unpredictable, unfortunate or unexpected things can happen. Recovery of loan portfolio in full is hardly possible. It is interesting and surprised to find 100% loan recovery anywhere in the world. Bank can compensate this small unpaid portion by using profitable loan portfolio. But lenders should be beware of skillful, wilful and professional defaulters who have been blacklisted by the financial institutions due to their bad past records and still not been black listed due to various kind of influences.

Commercial banks in Sri Lanka have maintained almost 50% of their loan portfolio with almost unsecured or clean basis loans and advances. It is assumed that these loans have been granted after evaluating the Lending Propositions skilfully and prudently.

If it is so, why these banks are writing off billion of rupees for identified bad debts and providing for doubtful debts every year?

Are these provisions to compensate the loss generated from unfortunate and unexpected events or wilful defaulting? or whether it is a result of unwise credit decisions or activities of less educated and untrained staff who have not done credit evaluation properly.

Recovery rate

Recovery rate of an advance/loan depends on many factors. Some of them are:

* Character, integrity, trustworthiness, honestly of the borrower or the reputation of the business.

* Creditworthiness/ repayment capacity/ net worth of the borrower.

* Skill, knowledge and know-how of the borrower

* Way of evaluating the Lending Proposition by the credit staff

* Unexpected and unforeseen events

The recovery rate depends on the above factors rather than availability of security. These loans have been granted to skillful and talented people who are not financially rich and have no tangible assets to provide as security. A personal borrower who has high degree of integrity or a company with high reputation which is owned by highly respectable Directors will never default their loans.

A honest person with good net worth or a business where credit worthiness is acceptable will maintain their financial requirements at an optimal level with a high rate of repayment. Skill, knowledge and know how of an individual or the management of a business will be helpful for them to manage the business properly and run as a profitable venture. The art of evaluating and analyzing the Lending Proposition by the credit staff will definitely decide the ultimate recovery rate. Identification of the correct borrower is the main theme of an analyzing of a Lending Proposition.

If it is not done prudently the entire credit process will get upset and end up by increasing the provision figure for bad debts in the Profit and Loss Account of the business.

Unexpected and unforeseen events will create some bad debts placing the debt recovery rate less than 100%. If the recovery rate is 100%, it gives as indication that on one hand the evaluation of credit proposals has been done effectively and prudently and on the other hand the credit system is not operating in its full capacity. The later is not healthy since some funds are idling in the system without using it for investments, lending etc.

Samurdhi Credit Program - Year 2000 Recovery Rates

It is remarkable to note that the recovery rate of loans granted through SBS is more than 100%. This is because some borrowers had repaid more than the amount that they were required to pay. These loans have not been granted against tangible assets.

It clearly shows that skillful people with high degree of integrity with a good social standing always repay their loans. It also gives the indication that this very successful project can further be expanded by granting more loans and advances to the properly identified borrowers.

Some of the credit schemes operated by the Rural Credit Department during the Year 2000 - Source - Central Bank of Sri Lanka

While almost all the projects are successful with the average of 93.5% debt recovery rate the Surathura program has partially failed with a lower percentage of recovery rate i.e. 53%. The objective of this project was increasing income & improving living standard of unemployed educated youths by promoting self employment among them. It has been revealed that the reason for this low rate was the poor identification of borrowers.

Reducing risk

The risk involved in lending can be reduced by adopting various techniques. It is advisable to follow number of mnemonics (memory tricks) as guides to evaluate the Lending Proposition. Carrying out of some feasibility studies is another important thing. The external environment should be analyzed thoroughly.

Technical, managerial, environmental, political & economical impacts must be closely monitored.

A properly designed method should be utilized to collect relevant data about competitors & marketability.

These raw data should be carefully processed to convert them into valuable & meaningful information.

The previous defaulters can be identified through the CRIB (Credit Information Bureau). The objective of the CRIB is to collect & collate information on borrowers & furnish credit information to lending institutions. In year 2000 it had maintained a data base of 172,099 borrowers.

In that year 66,476 loans & advances were regular in repayment & 37,864 were reported irregular. When evaluating the Lending Proposition a weightage should be given to borrower's stake (borrower's contribution) also. This increase the borrower's responsibility & commitment towards the successfulness of the business.

A very suitable tool to cover the unfortunate & unexpected events which lead to non payment of loans is an assignment of an Insurance policy. It is a convenient tool than a tangible asset like property. The procedure of charging an Insurance Policy (Assignment) is very simple & clear.

Recruiting skillful, well educated & intelligent staff will lead to taking prudent decisions & proper analyzing of Lending Propositions. They should be carefully trained to handle the pre section & post sanction monitoring, follow up & recovery procedures of the loan.

Monitoring of lending should be concentrated on checking up on how the money has been used (end - use of the credit) & what the customer is doing about repayment. The repayment might be possible with some additional effort. The repayment schedule should be sound & vigorous adopting a pressure on the borrower.

The approval procedure of the loans should be streamlined. Credit approval limits should be delegated carefully according to the authority levels of the credit staff. Very large amounts should be referred to the Board of Directors.

A Credit Committee should be set up to take prudent credit decisions & this vital committee should be enriched with professionals who have good track record of granting quality credit, and legal & financial experts. The credit decisions should be purely based on the hand on information generated from the historic data & mainly on the outcome expected from future activities & plans.

It should not be based on friendship or short term marketing objectives. A wrong credit decision can prove disastrous for the continued survival of the bank as well as the business.

It is not prudent to lend very large amounts to a single borrower. There should be single borrower limit. It is also not wise to disburse money in large amounts to a few individuals, companies or industries.

The risk should be spread by diversifying the loan portfolio. Banks act as financial intermediaries. They lend money which is mobilized from the depositors.

The basic relationship the bank has with its depositor is debtor-creditor in nature. Any unwise credit decision will badly affect this deposit base in case of building of same or ability of repayment of same on demand. Therefore the safeguard of these money is the major responsibility of a bank by taking prudent credit decisions based on the skills of the borrower.

The Web Genius

Internet Marketing International (Pvt) Ltd., Colombo, Sri Lanka, has signed up with "The Web Genius" - a New Zealand based web solution company to assist and support companies and organisations in Sri Lanka, to grow their businesses locally and internationally.

The Web Solution named "The Web Genius", features website content management and E-mail marketing software. Introducing for the first time in Sri Lanka the concept of Internet Online Marketing. Internet marketing for traditional businesses and Social organisations servicing the local market.

The internet is simply the delivery mechanism. The key is to combine age-old marketing wisdom for traditional businesses with the power of the internet. This combination provides unprecedented opportunities for the cooperate sector to expand their client base and develop increasingly profitable relationship. For this the solution is Online Marketing System.

Several years ago everyone seemed to be saying "your business needs a website, or you'll be out of business". It was rubbish then and it's rubbish now. But an ONLINE MARKETING SYSTEM of which a website is one component that can give your business an edge over competitors who are slow to pick up on this novel concept. The entire System provides - a personalized customized updateable website, Free Domain Registration, unlimited server space, facility to create your own marketing database, automated personalized email marketing, site statistics, Electronic newsletters and email bulletin etc., To date IMI (Pvt) Ltd., has offered "The Web Genius" services to a few organisations in Sri Lanka and they have found the product as a brilliant and flexible solution. Also, "The Web Genius" content management has saved a person and upgraded the secretaries as web developers. Marketing expenses have been cut down and shown higher sales with bigger profit margins.

Lanka ideal for management 
program - Norberg

by Pelham Juriansz

The International Board and Management Program conducted at the Light House Hotel in Galle from November 11 to 22 sponsored by the Swedish International Development Cooperation Agency (SIDA) was a tremendous success not only in its course content and participant content but also in the type of participants that it attracted as well.

Deputy Minister of Plantation Industries, Navin Dissanayake, Lalith Gamage, MD of the Sri Lanka Institute of Information Technology, foreign participants from Nepal, Bhutan and Pakistan and Osman Waheed Chairman of the Chamber of Commerce in Lahore were present.

The aim of the program was to provide effective and efficient development assistance in a changing world.

SIDA's activities are based on the assumption that the recipient countries wish to carry out changes and are willing to invest their own resources to achieve these changes, Ojvind Norberg the Convener of the Program said.

In the next few decades, business cooperation in the world is likely to grow and more countries will join the group of industrialised nations.

The developing countries will endeavour to reach substantially higher levels of industrialisation and obtain technology transfers and cooperation agreements with experienced firms in the developed countries, he said.

Cooperation will not only include trade, but also the creation of joint ventures, joint development projects, package deals, turnkey projects and agent networks representing foreign firms.

Ojvind Norberg the Convener of the Program said that the objectives of the program include: to develop the art of ownership and to increase participants' capability as members of the Board of directors thereby to substantially increase the companies' productivity and profitability.

"Advancing the participants knowledge and understanding of board functions such as the role and responsibilities of the Board member and of the Chairman is important," he said.

The strategic role of the Board and legal responsibilities and the economic issues, monitoring the company's development and financial, the cooperation between the Board and the Managing Director, analysing the Annual report are some of the key areas discussed during this program.

The target audience included Directors of Boards, Managing Directors, General Managers, Senior Directors and Managers, owners and owner representatives from private, cooperative and state-owned large and medium-sized companies and organisations in Sri Lanka, India, Pakistan, Bangladesh, Nepal, Bhutan and the Maldives. There were 23 participants selected from 62 applications.

The course lecturers were Ojvind Norberg, the Swedish Convener from Upsala University and Jan Hedstrom of the Institute of Advanced Marketing and Ajith Nivard Cabraal a Chartered Accountant by profession who is also a Management Consultant.

Eardley Perera, a Chartered Marketer with over 27 years in Management,Lakshman Watawala a Chartered Accountant, Management Accountant, Sunil Wijesingha a qualified Production Engineer and a Fellow Member of the Institute of Management, Aritha Wickramanayake, Attorney at Law, former State Counsel and Master of Arts in Law and Diplomacy and Rizvi Zaheed, Economist were among the distinguished panel of lecturers.

Referring to the history of the program Norberg said that the program was first started in 1975. Ojvind said: "Sri Lanka was chosen as the venue for this Program because Sri Lanka is a small country and if we influence the leadership here we can influence a good cross section of people. We have had Conferences in Africa and Europe but Sri Lanka will be our hub in South Asia."

"I love Sri Lanka and hope to have many more conferences here. This is my third visit here and the second program that we had and we hope to have many more here," he said.

Continual improvement through 
ISO 9000

by S.W. Karunarathne, ISO Consultant

ISO 9000 Quality Management System encourages organizations to,

* Analyze the customer requirements.

* Define processes needed to realize an acceptable product.

* Control of those processes.

* Improve those processes and their product continually.

Continual Improvement must be the organizations permanent objective.

The role of the top management is to decide on actions for improvement of the QMS based on factual evidence.

ISO 9000:2000 encourages organizations to:

(a) Determine the needs and expectations of the customers and other interested parties.

(b) Establish policies, objectives and a work environment necessary to motivate the organization to satisfy these needs.

(c) Design, resource and manage a system of interconnected processes necessary to implement the policy and attain the objectives.

(d) Measure and analyze the adequacy, efficiency and effectiveness of each process in fulfilling its purpose and objective and pursue the continual improvement of the system from an objectives evaluation of its performance.

The eight Quality Management principles used as the basis for ISO 9000:2000 are:

1. Customer focus through determining needs and expectations of customers.

2. Leadership through policies, objectives and work environment.

3. Involvement of people by managing a system of processes rather than functions.

4. An application of the process approach through linking policy, objectives, processes, measures, results and improvement.

5. A systems approach through the interconnection of processes focused on achieving objectives.

6. Continual improvement from the results of measurement and analysis of processes.

7. A factual approach to decision-making through the objective evaluation of process measurement data.

8. A focus on mutually beneficial supplier relationships.

Continual improvement/ the basic steps

1. Analyzing and evaluating existing situation to identify areas for improvement.

2. Establishing improvement objectives.

3. Searching for solutions to achieve objectives.

4. Evaluating solutions and selecting optimum ones.

5. Implementing the selected solutions.

6. Evaluating results.

7. Formalizing changes.

Product realization and support processes

1. Skills and knowledge needed by the organization.

2. Responsibility and authority for implementation of process improvement plans.

3. Resources needed such as financial and infrastructure.

4. Metrics for evaluating the improvement of performance.

5. Needs required for improvement including methods and tools.

Note: Continuous improvement should be discussed at all management review meetings. Measurement data should be converted to information. Measurement and information are the basis for performance improvement.

Analysis of data

The organization shall determine, collect and analyze data to demonstrate the suitability of the QMS and Evaluate opportunities for continual improvement.

The analysis of dada shall provide information on:

(a) Customer satisfaction.
(b) Conformance to product requirements.
(c) Characteristics and trends of processes and products.
(d) Suppliers.

The organization shall continually improve the effectiveness of the QMS through the use of:

* Quality policy.
* Quality objectives.
* Audit results.
* Analysis of data.
* Corrective and preventive action.
* Management reviews.

Top management should create a culture which involves people in actively seeking improvement opportunities.

This can be achieved by:

* Empowering people to accept responsibility to identify improvement opportunities.
* Setting of objectives for people.
* Benchmarking competitor performance and best practice.
* Recognition and reward for achievement.
* Suggestion schemes including timely reaction by management.

Bench Marking is more than giving marks. It is a way of measuring a firm's strategies and performance against best in class firms both inside and outside the industry. The aim is to identify the best practices that can be adopted an implemented by the organization with the purpose of improving a company's performance. The process of benchmarking is divided into seven phases.

1. Which functions to benchmark.
2. Importance of each subject area.
3. Whom to benchmark against.
4. Gather the benchmarking information.
5. Identify performance gaps.
6. How to learn from the best in the class (Bench Learning).
7. Implementation of changes (Bench Action). Bench Marking, Bench Learning and Bench Action is a continual improvement strategy.

Implementation

(Bench Action) often takes time to be successful. Changes are not always easy to undertake. In particular, changes of habits and routines are often time-consuming and complicated.

In an organization these habits and routines are often time-consuming and complicated. In an organization these habits and routines have developed over a long period of time. Therefore, new concepts have to be learned and put into practice before the Bench Marking process has a real effect. The learning processes are related to both the individual and the organizational level. The employees have to understand and be willing and able to change their way of thinking, and the whole organization should support the actions taken.

One major limitation is that competitors may be unco-operative.

Gathering competitive intelligence requires considerable time, effort and money. Further, there can be ethical and legal questions about some intelligence activities.

The customer can be a source of information for benchmarking. Ask the customers about the criteria in choosing suppliers. Identify the key success factors through such inquiries.

Total quality management

Total Quality Management concepts should also be utilized with ISO 9000 standard for increasing effectiveness and greater value.

The basic necessity is the intrinsic technology, which means continual upgradation to keep pace. Without the intrinsic technology, which is really the foundation, other concepts, techniques and promotion of TQM will not be effective. The three pillars of TQM are:

First pillar - Basic Concepts This can be achieved by internal and external customer satisfaction and by understanding the ultimate customer needs.

Second pillar - Techniques

It is not only the management commitment to quality, but also using the correct data and techniques, PDCA cycle, by facts, SQC etc.

SQC tools include Check Lists, Pareto Analysis, Histogram, Cause and Effect Diagram, Graph/Control Charts, scatter Diagram.

Third pillar - Vehicles for promoting TQM such as

Policy management.

Educational and training courses.

Cross functional management.

QC circles.

Process for continual improvement

A strategic objective of an organization should be the continual improvement of processes in order to enhance the organization's performance and benefit its interested parties. There are two fundamental ways to conduct continual process improvement, as follows:

(a) Breakthrough projects which either lead revision and improvement of existing processes or the implementation of new processes; these are usually carried out by cross-functional teams outside routine operations;

(b) Small-step ongoing improvement activities conducted within existing processes by people. Breakthrough projects usually involve significant redesign of existing processes and should include:

* Definition of the objectives and an outline of the improvement project.

* Analysis of the existing process (the "as-is" process) and realizing opportunities for change.

* Definition and planning of improvement to the process.

* Implementation of the improvement.

* Verification and validation of the process improvement, and

* Evaluation of the improvement achieved, including lessons learned. Breakthrough projects should be conducted in an effective and efficient way using project management methods. After completion of the change, a new project plan should be the basis for continuing process management.

People in the organization are the best source of ideas for small-step or ongoing process improvement and often participate as work groups. Small-step ongoing process improvement activities should be controlled in order to understand their effect. The people in the organization that are involved should be provided with the authority, technical support and necessary resources for the changes associated with the improvement. Continual improvement by either of the methods identified should involve the following:

(a) Reason for improvement: a process problem should be identified and an area for improvement selected, noting the reason for working on it.

(b) Current situation: the effectiveness and efficiency of the existing process should be evaluated. Data to discover what types of problems occur most often should be collected and analyzed. A specific problem should be selected and an objective for improvement should be set.

(c) Analysis: the root causes of the problem should be identified and verified.

(d) Identification of possible solutions: alternative solutions should be explored. The best solution should be selected and implemented; i.e. the one that will eliminate the root causes of the problem and prevent the problem from recurring.

(e) Evaluation of effects: It should then be confirmed that the problem and its root causes have been eliminated or their effects decreased, that the solution has worked, and the objective for improvement has been met.

(f) Implementation and standardization of the new solution: the old process should be replaced with the improved process, thereby preventing the problem and its root causes from recurring.

(g) Evaluation of the effectiveness and efficiency of the process with the improvement action completed: the effectiveness and efficiency of the improvement project should be evaluated and considerations should be given for using its solution elsewhere in the organization.

The process for improvement should be repeated on remaining problems, developing objectives and solutions for further process improvement.

In order to facilitate the involvement and awareness of people in improvement activities, management should consider activities such as:

* Forming small groups and having leaders elected by the group members.

* Allowing people to control and improve their workplace, and

* Developing people's knowledge, experience and skills as a part of the overall quality management activities of the organization.

Effective selling in a turbulent market

by Prasanna Perera, Chartered Marketer, CIM (U.K.)

I have received numerous requests to enlighten organizations in Sri Lanka, on how to achieve the best sales result in a competitive marketplace. In this article I will endeavour to share some insights relating to selling different types of products from edible to durable to industrial.

One only needs to scan the newspapers or take a drive down a main highway to observe the great proliferation of "sales" being conducted. Endless stock clearance sales that go on for months or discounts being offered from sugar to everything and anything!! My question is "are we saying that effective selling can only be conducted by providing discounts?" We do not need professional salesman, if everything is discounted and sold forever.

Against his background, let me shed some light on effective selling.

The Sri Lankan market

Many a person is of the view that Sri Lanka is a large market because we have a population of 19.3 million. What is relevant is as to how many persons can afford to purchase a given product and from this perspective the numbers can be drastically lower. For many non-essential super-luxury products, the potential numbers can be as low as 0.5 million persons. For essential personal care products, the market could be in the range of 5 - 6 million persons. (Only 31% of the total population). Therefore, for all practical purposes, the Sri Lankan market is very limited for a majority of products and services.

The Sri Lankan consumer is unique and demonstrates certain characteristics.

1. Price sensitive and is concerned about the initial investment. (How many rupees?)

2. Is influenced a great deal by mass media advertising (TV, Radio, Newspapers)

3. "Word of mouth" references are sought and acknowledged as important. These references can come from friends, family etc.

4. Dealer/retailer recommendations are important, and considered as such.

5. A general belief that imported products are of better quality than local products.

6. Willingness to pay for convenience and reliability.

7. Very habitual in purchase behaviour, often patronizing the known retailer and supermarket.

8. Brand loyalty is quite high and is a manifestation of searching for lower-risk options.

Effective selling in the Sri Lankan market

The abovementioned characteristics are not fully comprehensive but were intended to provide the necessary backdrop for effective selling.

Whatever the product being sold, building relationships with customers is very important. Sri Lankans conduct business through networks and relationships and they are vital for success in a difficult market. This relationship is essential, immaterial of whether it is between retailer and customer or company representative and retailer. Therefore, to be effective in selling, strive to build a solid rapport with your customers.

A good understanding of customer needs is a prerequisite for effective selling. This may sound very familiar but is worth repeating. A good salesman will take the time and effort required to correctly interpret and learn the behaviour of different customers. (Two customers are never the same).

Since customers are price-sensitive, a good sales strategy is to avoid talking price at an early stage in the selling process. Highlight to the customer the benefits offered, including the service dimension, so that price becomes secondary and often gets justified.

Benefit-oriented selling is the right approach rather than selling features. In order to sell benefits, a good knowledge of competitor offerings is required for contrasting purposes.

Through factual information and details, a competitive advantage can be obtained whilst selling. The ability to handle customer objections and queries is vital, for effective selling. The salesman who is extra competent in this regard, will have the edge in a difficult marketplace. In order to handle objections, listening is very essential.

Many salesman talk too much and forget to listen! The result is a lost selling opportunity.

Range-selling skills are vital to cultivate, since additional revenue can be obtained in difficult times.

Most organizations market product ranges which have complimentary features and benefits. For example, toothpaste, toothbrushes and mouthwashes.

In difficult times, do not block the customers capital, by overselling. It is better to be prudent by accurately determining selling - in quantities, so that no artificial selling takes place, resulting in products returns and customer dis-satisfaction. Regular orders are important in difficult times and this can only be achieved through objective selling based on off-take.

Prospecting of potential customers is an activity that should be paid special attention, in depressed markets. For example, if you are selling a frozen product, look out for outlets that stock Astra Margarine, Yoghurt and ice cream. If you are selling a product that needs to be consumed "on premise" look out for outlets at busy commuter points such as bus stops and railway stations.

In tough times, perseverance, skill and a "never say die" attitude is required to survive and prosper. Organizations would do well to invest in their field sales persons by enhancing their selling skills through both on-the-job and external training. Further, reward schemes tied up to performance, would be attractive, although a decent basic salary is required for job security and peace of mind.

"There are 3 types of persons. Those who wondered what happened, those who watch things happen and those who make things happen"

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