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SWOT Analysis

Base on Improve Loan Approval Process

Group: TTTM - Feb 2012 MGMG694 CP Banking Management

Objective
To Develop loan approval process to be more effective and cover to SME loan from related agriculture business.
Effective mean: 1. Process time is comparable to the competitors (1 month for agriculture loan and 15 days for SME) 2. Approval criteria must focus in both collateral and business feasibility (reduce NPL and support opportunity for SME loan) 3. Credit Analyst or Officer must have at least basic financial knowledge as well as the market/business environment data should be available to used at all time

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Online application. Insufficient officer 7. Resistance in change from age. Credit bureau system 1. Hacker 3. Computer structure in the system 2.3 . 3. Knowledge in agriculture 1. Knowledge and experience. ASEAN Economic Community (AEC) 2. etc 2.SWOT . 4. 5. Using Outsource 6. Knowledge exchange 3.Analysis STRENGTH WEAKNESS 1. Customer relationship. Abnormal situation such as disaster. New technology 4. Agriculture database 3. 2. protest. High NPL 1. Change in Government cabinet OPPORTUNITY THREAT Slide . revolution. Many approval level require when change 4.

is installed for timely.Strength Computer Structure 1. relevant and accurate information to support better business decisions Core Banking System (CBS) to manages financial transactions Data Warehouse to keep customer information Source: www. BAAC already applied computer structure into the loan approval system.4 .php?content_group_sub=17 Slide .baac.or.th/content-about. BAAC invest in 3 core system to develop their service which are: Financial Management Information Systems (FMIS) . From the BAAC website.

5 .Strength Agriculture database 2. BAAC already have large agriculture database as their client which will useful to improve the loan approval process especially when they change to SME business Source: BAAC 2010 Annual report page 129 Slide .

BAAC maintains the good relationship with their customer (client) for a long time as their concept of Service at Door Step . BAAC have many branches around the country which can be the information channel. So.Strength Customer Relationship 3. Moreover.6 . it will be more easier to collect additional data (when required). BRANCHES BAAC SCB KTB BBL KBANK BAY TMB 1131 1096 1024 981 833 587 459 Slide .

Many of BAAC officer has background on agriculture degrees.7 . Slide . The BAAC s mission was to extend credit more widely. So. directly to individual farmers as well as through farmer institutions.Strength . it will help officer to valuate the SME project which result in faster approve.Knowledge in agriculture 4.

Weakness Slide .8 .

9 .Weakness Slide .

10 .Weakness Slide .

Weakness Slide .11 .

12 .Weakness Slide .

13 .Weakness Slide .

Weakness Slide .14 .

thaifta.aspx Slide . Due to mutually agreement of each member able to hire and rotate skilled worker from other countries to fulfill their lack. Source: www.com/thaifta/Home/tabid/36/ItemId/4374/ctl/Details/Mid/582/Default. Thailand prepare to join ASEAN Economic Community (AEC) in 2015.AEC 1.15 .Opportunity .

So. The two banks began cooperating in 1997. The banks decided to enlarge their cooperation due to their similar responsibilities.php The Agricultural Promotion Bank (APB) of Laos signed a memorandum of understanding on mutual cooperation with the Bank for Agriculture and Agricultural Cooperatives (BAAC) of Thailand in Vientiane.Opportunity .dailynews. financial business operations.16 . it will have opportunities to exchange the technology/knowledge among country According to (Asia Pacific Rural and Agricultural Credit Association : APRACA Co-operate and fulfill strength to each others for sustainable development Agricultural Promotion Bank Source: http://apb.Knowledge exchange 2.la/index_en.net/laopdr/index. BAAC have support by Thailand government. and customer bases. exchanging experiences in human resources development and staff upgrading.php?option=com_k2&view =item &id=269:lao-thai-agricultural-banks-extend-cooperation&Itemid=36 http://www. EC-FAO Food Security Programme & Dailynews 3 Dec 2011 Source: http://foodsecuritylink.th/article/223/1437 Slide .co.com.

Bank System&Technology Source: http://www. As the technology keep development. the new technology (tools) for support and enhance the loan approval process are update all the time.New technology 3.com/riskmanagement/209400667 Slide .banktech. The latest in EMC s RSA security includes hardware tokens and software tokens to suit mobile banking customers.17 . The benefit of using new technology can be in form of: Faster & More Secure Convenience & paperless Double checking and able to track back the historical trail. RSA Offers New Security Tokens for Online Banking. So.Opportunity .

Credit bureau system 4.Opportunity .18 .ncb.th/ Slide . Establish the alliance with National Credit Bureau. Enhance the useful database of credit bureau to mapping with BAAC s client ( Especially in group of agriculturist) In order to reduce the time to manage and process the loan approval. Source: www.co.

19 . Markets and banks were closed on Thursday. Krung Thai Bank KTB.Threat Abnormal situation 1. "I am confident that if the measures can be implemented as planned. 22 in Ayutthaya. the flood problems will be less serious than last year. the Bank of Thailand said Monday. including many bank branches.com/national/Govt-seeks-2-million-rai-tohold-flood-water-30175684. said 39 properties had suffered fire damage. protest. earth quack.reuters.given the likelihood that wet-season flooding this year could be as severe as last year. Reuters 20 May 2010 Source: www.com/article/2010/05/20/thailand-businessidUSSGE64J0F520100520 Prime Minister said the government is looking for 2 million rai of land to use as areas to hold flood water . 31 in Nakhon Pathom." Yingluck said The Nation 12 Feb 2012 Source: www.nationmultimedia. Bangkok Post 7 Nov 2011 Source: www. Thailand is counting the economic cost and financial toll of a crisis.com/business/news/265136/m ore-bank-branches-atms-closed After two months of protests that ended in an arson spree. two retail banks and a financial firm reported that they had now temporarily closed a total of 620 branches in flood-stricken provinces. The country's second-largest lender. 11 in Samut Sakhon. five in Nakhon Sawan and one in Chai Nat. revolution may effect to loan approval process when some branch need to closed during the event. 333 outlets are in Bangkok.html Slide . Thirteen commercial banks. Abnormal situation such as flood.BK.bangkokpost. 149 in Pathum Thani. Of the total. 68 in Nonthaburi.

Police confiscated two computers from the house.000 baht from internet bankers.com/news/local/248490/suspected-internetbank-hacker-held Hackers have stolen data from thousands of Citibank customers in the US.uk/news/technology-13711528 Slide .bangkokpost.20 . Citigroup is the latest in a string of high profile companies to be targeted by cyber criminals. BBC 9 June 2011 Source: www. Bangkok Post 24 July 2011 Source: www.Threat Hacker 2.co. The breach exposed the names of customers. they can hack into the system and make the system down for several day which effect directly to the loan approval process Police have arrested a 23-year-old hacker who allegedly stole more than 500. account numbers and contact information. the bank has confirmed.bbc. Officers from the Technology Crime Suppression Division (TCSD) arrested Akaphan Gummanoi at a house in Soi Maiyalap on Rarm Intra Road late on Friday night for allegedly robbing Siam Commercial Bank accounts. the bank said in a statement. Hacker.

th/home/minister_3. 2549 (2006) stipulated that BAAC Board of Directors be consisted of the Minister of Finance as ex officio chairman of the Board. Kittirat Na Ranong Mr.E. Surapong Suebwonglee Dr.R.html) Slide . As the data in the annual report stated that the chairman of BAAC is the ministry of Finance.mof.E. So.E. Korn Chatikavanij Mr. 2509 (1966) amended in BAAC Act (Fifth Amendment) B.go. BAAC 2009 Annual report page 176 Period JAN 11 present JUN 10 JAN 11 DEC 08 MAY 10 SEP 08 DEC 08 FEB 08 SEP 08 MAR 07 FEB 08 OCT 06 FEB 07 Name Mr. in term of any change in cabinet may have effect to BAAC policy and plan.Threat Government Cabinet 3. 2542 (1999) and (Sixth Amendment) B.21 . Pridiyathorn Devakula Source: Ministry of Finance (http://www. a vice chairman and up to twelve other board members appointed by the cabinet. Chalongphob Sussangkarn M. Thirachai Phuvanatnaranubala Mr. Suchart Thada-Thamrongvech Mr. The data from annual report show that chairman has been change for more than 6 times during 2007 2012 (especially in 2008 that 3 times) Under the Section 14 of BAAC Act B.

‡ Communicate the company target and benefit from change (may applied Kotter s change model) 2 Reference: Kotter. ‡ Target to reduce traditional manual work as well as convenience get approval from the bank Slide . 3 Develop the online application in order to support live-time activities ‡ Collect data and make decision between make or buy the system ‡ Create/upgrade should be step by step which may start with application online module and develop to tracking system. (1996).22 .Suggest Solution Solution 1 Develop knowledge of employee in term of financial and marketing Prevent the resistance from employee on change in the process Action plan ‡ Conduct the training or workshop to increase the financial and marketing skill to the officer ‡ Revised the KPI (or other measurement) to included the training participate. John P. Leading Change.

to be more efficient especially the first stage to reduce nonperforming loan problem Slide . ‡ Recruit or develop the existing employee (target at 25% of outsource team) ‡ Work with outsource in the first phase as the OJT to develop the knowledge and skill 5 Develop HR department/system ‡ Collect the data and analysis of the current workload for each loan approval process officer.Suggest Solution Solution 4 Develop the appraisal team which respond for monitor and audit the outsource work for collateral appraisal. to be able to set the suitable ‡ Using ratio analysis to calculate the number of officer require number of employee to handle client ‡ Using sensitivity analysis to support the additional client from SME 6 Develop credit approval process ‡ Revise the verify client information system to screen the black list or potential NPL at the first stage. Action plan ‡ Set the appraisal unit into the loan approval team.23 .

Suggest Solution Solution 7 Revise the level of authority to allow branch/province manager to be able to approve the loan with suitable tolerance Create collateral guideline/book to support the appraisal collateral process and faster. Action plan ‡ Analysis the existing data to group the loan into many group as total amount ‡ Calculate the proper level of authority for branch/province manager to reduce the approval process step. 8 Slide .24 .

Q&A Feb 2012 MGMG694 CP Banking Management .

Thana Wattanasak Mr. Chiraroj Angsumalee 5349204 5349211 5349212 5349265 Slide .Team member Mr. Thanapol Vachirarojpaisorn Mr.26 . Teerawat Hungsasut Mr.

Reorganization structure to set the job to match with age to prevent resistance from old employee (THAM) Applied Kotter change theory 3. Develop knowledge of employee in term of financial and marketing Conduct the training or workshop to increase the financial and marketing skill to the officer as well as revised the KPI to included the training participate. Develop the online application to support online activities (make/hire) and easy to track the process and easy to approve from bank (MAN) Used benefit of online system to let the client able to submit the application anytime as well as able to track the process. 2.27 . (example of ME) Slide .Suggest Solution 1.

Develop credit approval process to be more efficient at the first stage to reduce number of bad application (TOP) Revise the verify client information system to screen the black list or potential NPL at the first stage. the appraisal unit can be work instead.Suggest Solution 4. Develop HR to be able to get the right number of employee (TOP) Collect the data and analysis of the current workload for each loan approval process officer. Using ratio analysis to calculate the number of officer require to handle client plus using sensitivity analysis to support the additional client from SME 6. (TEE) Hire or develop the officer to be act as appraisal unit.28 . Slide . Moreover incase of lack of outsource. Develop the appraisal team (25% of outsource) to monitor and audit outsource work as well as work instead of outsource in case of lack of available of outsource. Appraisal unit will respond for monitor and audit the outsource work for collateral appraisal. 5.

Create collateral guideline/book to support the appraisal collateral process and faster.29 . (THAM) Slide .Suggest Solution 7. Analysis loan amount and calculate the portion to Revise table of authority to allow branch/province manager to able to approve loan with higher amount that large portion of total loan (MAN) 8.