A chapter co-authored by IBA alumnus Talha Nadeem (BBA, Class of 2010 and MS Economics, Class of 2015) on the credit guarantee scheme (CGS) in Pakistan has been published in a handbook titled "Unlocking SME Finance in Asia: Roles of Credit Rating and Credit Guarantee Schemes". The chapter, titled 'Marketing: the crucial success factor for Pakistan's credit guarantee scheme', represents the first comprehensive study on the CGS in the country.
For background, The State Bank of Pakistan introduced a "Credit Guarantee Scheme for Small and Rural Enterprises" in 2010 to alleviate the severe rationing of bank credit to small and rural enterprises, by sharing the risks of lending. Early on, the scheme guaranteed up to 60% of the participating financial institutions' (PFIs') fresh portfolio of financing to small and rural enterprises, while PFIs bore only the remaining 40% of the risk. However, the response to the scheme was initially muted and, even now, there is much untapped potential.
In this context, the published chapter explores a less obvious factor that may have diluted the scheme's impact, namely inadequate marketing by the banks. The research borrows elements from the "4 Ps" of marketing model; the modified "4 Ps" explored are people, product, processes and promotion. Insights from interviews with commercial bankers are summarized in three case studies. The key finding is that CGS originators can maximize the scheme's impact by paying attention to the marketing mix of participating financial institutions.
Regarding the handbook, it is an OECD, ADBI and Routledge co-publication, edited by Naoyuki Yoshino and Farhad Taghizadeh-Hesary. It is an essential resource for students, professionals, and government officials interested in finance and SME policy.
Disclaimer: Views expressed belong to the chapter's co-authors, and are by no means a reflection of the views of SBP as an institution.
Brief Profile: Talha Nadeem is an analyst with diversified professional experience of working within a central bank, academia, and corporations. In his current role at the State Bank of Pakistan, he contributes extensively to the bank's flagship publication, 'The State of Pakistan's Economy'. This involves an in-depth analysis relating to the monetary and real sectors of the economy. Moreover, he also provides extensive editorial input for the publication.
In addition, Talha prepares research-based notes and briefs on a wide range of topics, such as monetary dynamics, financial sector reforms, corporate sector analysis, financial inclusion, and debt. He also composes speeches and talking points for meetings and interviews of the senior management.
Furthermore, Talha delivers trainings on effective writing and communication skills offered by the National Institute of Banking and Finance.