Corporations are increasingly active in terms of lending

Corporations are increasingly active in terms of lending loans to their clients and may even displace banks. This trend was highlighted by Michael Samonas, Group's CFO at SIDMA A.S, during the second annual forum of financial executives in Bulgaria, organised by Ernst & Young. Because of the introduction of new financial regulations, related to the projects of "Solvency 2" and "Basel III", credits will become even more expensive, the rate of bankruptcies will increase, and the outlook for economic growth will remain gloomy. Companies, however, are able to retain customers and tighten the circulating capital, which according to Samonas is the best solution in the period of intense economic environment like the current one. In fact, the company, managed by him, has already applied a rating system to its clients, which estimates as to whether to allocate them resources or not depending on their reported results. The observed indicators involve the pre-history of payments, the capacity of solvency, etc., as well as the forecasts for future sales and transactions. Based on these figures, the corresponding rating of the company is determined. In case of delay in payments, the penal interest rate is 8 %, specified the expert before the Klassa.bg daily. In order for a similar policy of granting credit products to be successful, the sales team must collaborate very closely with the finance department, recommended also he.


Thanks to our effective system, we can distinguish the solvent from insolvent clients and foresee any possible bankruptcies. What's more, the time required for the collection of the receivables by SIDMA A.S decreased from 143 days in 2009 down to 125 days in 2011, while in March 2012, it reached 116 days. And owing to the credit risk, the company has reduced its risk by four main ways referring to the elimination of bad loans, shortening the payment deadlines, the improvement of the cash flow and the decisions on the granting loans to the clients.

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