IFC helps Nations Trust Bank develop credit scoring for small and retail business lines

IFC, a member of the World Bank Group, is helping Sri Lanka’s Nations Trust Bank build capacity to improve credit processes and align them with global best practice for the benefit of its small and medium enterprise and retail business lines.

The initiative will also help the bank adopt best practices in risk management.

IFC Advisory Services in the region will bring international expertise to help Nations Trust Bank develop credit-scoring models for retail banking products, including credit cards, housing loans, auto finance, personal loans, and overdrafts.

This will enable the bank to expand and manage its SME and retail portfolio in a sustainable manner.

Director and Chief Executive Officer of Nations Trust Bank, Zulfiqar Zavahir said scorecards will be developed on the basis of best practices across the globe for retail banking portfolios, enabling the Bank to improve its risk management capabilities to international standards.”

Critical components to be considered during the development stage of the scoring models will include the bank’s current and future business volumes, the integration of the models into the core banking system, training, and roll-out plans.

IFC Regional Director for South Asia, Paolo M. Martelli said, “An important aspect of IFC’s advisory services is providing advice to banks to enhance their institutional capacity and improve access to finance for small and medium enterprises.”

Country Manager for Sri Lanka and Maldives Gilles Galludec adds “One strategic goal of IFC in Sri Lanka is to bring global solutions to selected partners in Financial Markets, including investments and Advice. The support to Nations Trust Bank fits perfectly in this strategy.”

IFC has signed memoranda of understanding with a number of local financial institutions to provide advice on a cost-sharing basis.

Nations Trust Bank signed an agreement with IFC in March 2007.

IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilising private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments.

IFC’s vision is that people should have the opportunity to escape poverty and improve their lives.

As of June 30, 2007 IFC had a committed exposure of over $90 million in Sri Lanka in equity, debt, and guarantees.

In the current year, IFC’s new commitments in Sri Lanka have surpassed $195 million, including over $20 million to local financial institutions.