SME Lending

From Open Risk Manual


SME Lending denotes any of a wide array of loans or related financial products that provide financing to small or medium sized enterprises.

A more granular approach defines not two but three groups: Micro, Small and Medium Enterprises.

SME Definition Criteria

SME's can be distinguished from large corporate entities on the basis of a number of criteria:

  • Number of Employees
  • Annual Sales / Turnover
  • Fixed Assets
  • Invested Capital

Business Models

Dimensions that differentiate SME Lending Business Models:

Regulatory Status

  • Capital requirements for SME exposures are set separately from corporate or retail exposures (see ASRF)

Accounting Status

  • SME loans would be typically accounted under IFRS 9 (or CECL) accounting rules

SME Credit Risk Models

Similar with other credit assets, SME credit risk models will include

See Also