Infact,Kazakhstan�ssmall and medium businesscertainlyas- sociated with risk. In this se�mentof business risks both, own- ersandinvestors. Corporations oftenrefuse to cooperatewith the companiesof small andmedium-sized businesses, as they con- siderthe level ofriskacceptable toSMEsthemselves. Durin�their career,SMEcompanieshave to copewith all sorts ofrisks,both exter- naland internal. And itplays a si�nificantrole in theirfinancial stabil- ity.Here are justsome of the risks, continuouslyaffectin� businesses:
- reduction in demandfrom majorconsumers;
- adverse chan�esin tax lawsorprocedures for licensin� ooffeeccoo-- nomic activity;
- an increasein lendin� ratesand thevolatilityof the national cur-- rency;
- the ne�li�enceof the contractualobli�ationsof partners;
- the ne�ative impactoflocal authorities; continuouscompetition and
The level ofthese riskshi�herthan the allowableresistanceto loss ofbusiness, or the willin�nessofentrepreneursto risk, brin�in� the companyinto bankruptcyandentrepreneursto lar�efinancial losses. This is due toa number of factors, which include:
- a more stablerelationshipof small andmedium-sized busi- nessesfromthe macrofactors, in comparisonwith lar�e enterprises
- SMEsdirectionon a narrowran�e of consumers
- limited capitaland, as a conse�uence,hi�h dependence oonn-- creditand otherborrowed capital
- a shorta�e of specialistsand a smallpayrollreasons �ivenan extremely ne�ativeimpact on theprofitability andattractivenessof the speciesof business,which leads toa small proportion oftheirturn- overin the economyof Kazakhstan.
To reduceexposure to riskssuchcompanies need todevelop a culture ofrisk mana�ement.However,small businessesusually havea small staffandlimited to a fewmana�ers ofmana�ers.Intheir or�a- nizationsnospecializedmana�ers, includin� in the area ofstrate�ic, financial, operationalorpersonnel risks.Only a fewamon� small businesseshavemoney forservicesof consultin� firms. Under these conditions,the problemof effectiverisk mana�ementis fullyborne by thehead of the company, as well as the control�roup. Typically, the- semana�ersare not expertson the risksand cannotspendto this �ues- tion sufficientamount of time.As a conse�uence,thesecompanies do not havesufficient reservesto deal with allkinds of risks, as well
as limitedfinancial resources. In addition, lar�e en- terprises in crisis situationscan count onfinancial supportfrom the state,whileSMEsare deprived of suchsupport.Despite all the difficulties, the markets existed and continue to exist, small and medium- sizedcompanies thathave been successfulin mana�- in� theirrisks.The small size ofthe enterprisesand the lack ofbureaucracy, allow mana�ersof small companiesmore �uicklypredict, detect and respond- to threats.System of riskmana�ementin small and mediumbusiness is characterized bymaximum sim- plification. The newrisk mana�ement systemshould beintuitive, accessible notonly to the headof the firm andshould not re�uirelar�e amounts offinancialand- time resourcesas well. The primary taskdurin� the implementationof risk mana�ementin small andme- dium-sized enterprisesinvolves identifyin�the most si�nificantrisks and threatsthat may subse�uently- adversely affect the activitiesof the enterprise.The second taskis to allocateprioritiesamon� theiden- tified riskson the basis ofprobability anddama�e caused bytheir implementation.Third, andperhaps- most important taskis to implementmeasuresthat can preventorreduce thene�ative effects ofthreats. At the same timeshould be determinedresponsible personsresponsible forthe introductionof both ther- isk mana�ement system, as well as for the reduc- tion ofspecific risks. SomeKazakhstan companiesto small andmedium-sized businessesare inthe process of introducin�elementsof risk mana�ement,which allows them tonot onlyreduceoperatin� lossesand protectthe company�s reputation, but also to effec- tivelyrun theirproductsin new markets, �uickly re- spond tocompetitive pressuresand become moreat- tractive to investors.
In the area of corporate credit risk mana�ement 2008year was a �ood test of the stren�th of mod- els used by the bank both individual and portfolio credit risk mana�ement. The past year has adjusted the bank�s risk appetite and accelerates the pro- cess of improvin� the existin� and introduction of new modern tools of the credit risk mana�ement, includin� the anti-crisis. Bank worked on the ac- cumulation of data to �o on �uantitative (statisti- cal) models of credit risk assessment. Consolida- tion produces statistical data on defaults, data were collected on the causes of delin�uency in order to improve mechanisms for identifyin� potential prob- lems in the early sta�es of the credit process (un- der the credit analysis of borrowers). Specialatten- tion has been paid to the processes to ensure the completeness and correctness of the information stored in the bank�s accountin� systems re�uired for a portfolio approach to risk mana�ement.Was finalized models assi�nin� internal credit ratin�s to corporate borrowers with a certain probabil- ity of default. Calibrate these models with the re- sults obtained ratin�s of existin� corporate clients. Statistics collected by the bank arrears by industry allowed makin� recommendations for a shift in em- phasis in lendin� based on the borrower�s industry sector. This will also correct the approaches to port- folio credit risk mana�ement. In the course of these investi�ations, the Bank developed criteria for as- sessin� the risk of the industry and introduced the method of assi�nin�the ratin� industry.
With the intensification of the crisis on a daily basis the bank be�an to conduct detailed monitorin� of the loan portfolio in order to identify at an early sta�e si�ns of impaired debts. Detailed analysis of the dynamics of revenue due to customers on the bank account, credit portfolios to ensure transac- tions are revalued value of collateral, includin� tak- in� into account the chan�es in its li�uidity.
A special role in the bank is to the or�anization of work with trouble assets, even more relevant in times of crisis. The main tasks of the bank to work with troubled assets are to prevent the loss of prop- erty of the bank and minimizin� losses when a dis- tressed assets.
Durin� 2008have been si�nificantly improved- procedures for assessin�the credit riskofsmall and- medium-sized enterprisesanda ran�e of measurest- hat minimize therisks:
setlimits onconcentrations of credit risk, product limits, limitsonthecompetenceoftheemployeesofthe financial analysis;
- chan�esinthe assi�nmentof internal credit rraatt-- in�sof borrowers;
- branches andbankcreditfacilitiesenteredof- ficerisk mana�ers, which are functionallysub- ordinateuniton risk assessmentin the head of- ficeand are responsible forcompliance withthe bankcreditdepartmentsof technolo�yandSMEcredit risk assessmentin settin�limits;besidesdesi�nate staffto monitorwhois functionallysubordinateunit- tosupportlendin� operations;
- To define theSMEcredit committeesfor settin� limits, workin� withproblem debts, monitorin�, al- lowin� �ualitativelyoptimize the decisions;
- or�anizedsystem of re�ularsite inspectionsof the credit�uality ofthe workin the unitsof small and- medium-sized businesses;
- updatedmana�ement reportin� systemusedto assess thechamber - operationof the loan portfo- The Bank shall promptlyrespondto chan�in� market conditionsin the IV�uarter of 2008, adjust- in� thecredit policyforsmall and medium businesses. Were ti�htenedconditions for the issuan- ceof credit productsto customer re�uirements,the financialsituation ofenterprises,takes collateral, identifies priority customer �roupandrelative industriesthat are particularly susceptibleto market- factors.Chan�edpolicybuildin� aportfoliotoward- sofmore profitableproducts, reducin� theavera�e- len�th of the loan, unsecured products.
Risk compensationrefersto the methods that- need to createmechanisms for the preventionof risk situations, to eliminatethe appearance ofcauses and risk factors. Paymentmethodsareself-insurancerisk, strate�ic plannin�, forecastin� economic environ- ment, active tar�etedmarketin�, monitorin� of socio-economic and re�ulatory environment, out- sourcin�, attractin� additional information.These- methodsconsider therisk compensationfrom the per- spectiveof their applicationin the activitiesof a small businessandidentify howtoallocate theirmana�e- ment practices. Self-insurance(redundancy)involves the creation ofan entrepreneurspecial reserve fund- for the account ofprofitamounts to coverunforeseen expensesupon the occurrence ofrisk events. The mainproblem in creatin�a reservefor unforeseen ex- pensesis to assess thepotentialconse�uences of risk. In the process ofself-insurance createsreserve andin- surance funds. Such funds, dependin� on the pur- pose ofthe appointmentcan be created in-kind and cash. For example, the subjects of a�riculturepro- ducenaturalreserve funds: fodder, seed, and others. This is due tothe possibilityof adverseenvironmental conditions.The creation ofthe reserve fundis manda- tory forjoint stock company,cooperativeenterprises with forei�n investment.
Self-insurance- it�s tooexpensivefor most small- businessentrepreneurs, the practical implementation is difficultlimited financial capacityof small enter- prises. Self-insuranceis advisablein the casewhere the value ofthe insured propertyin comparison with theproperty andfinancial criteriaof the busi- nessis small, and when the probability oflossis ex- tremely small. Self-insuranceis an economiclever, reception,helps neutralizethe risk situationand there- forerelates toeconomic methods of mana�ement. Strate�ic plannin�relatin�to the methods ofrisk compensationreflectsthe totality ofthe main�oals of the companyandways to achieve them.
First, the strate�ic plan sets thelon�-termdirec- tion ofthe company, identifies the mainactivities of the or�anization, allows to coordinatea unified system ofmarketin�, desi�n, manufacturin�and fi- nancial activities, as well as to betterunderstand the structure ofneeds,plannin�,promotionand market- in�, formation mechanismmarket prices.
Second, theplan definesthe or�anization ofalter- native actionsfor the lon� term, provides the basis forthe allocation of scarcefinancial resources.As part ofthe strate�ic plannin� processimplemented- four main typesof mana�ement activities:
- allocation of resources;
- Adaptation to the environment; 3)internal coordination; 4)or�anizationalstrate�ic
Strate�ic plannin�at the enterpriseit is advis- able toconsider notas a method ofrisk mana�ement, as well asa process, effectedby means ofactionsand decisionstaken bythe head ofa small businessthat lead to thedevelopment of specificstrate�ies to- achieve the �oals. Eventson strate�ic plannin�, whi- chis usually preceded byexplorin� the potentialof the enterprise,help to removemuch of theuncer- tainty, allowto predictthe emer�ence ofbottleneck- sin the production cycle, to pre-emptthe weaken- in� of thecompanyinits market sector, to identifyin advancethe specificprofile ofthe risk factorsof the enterprise. Forecastin�economic environmentisthe developmentof the periodicforecasts,development andevaluationof the futurestate of the environ- mentmana�ementfor the enterprise, inpredictin� the behavior ofpotential partnersorcompetitors� ac- tions, chan�es in themarket se�mentsin whichsmall businessadvocatesseller or buyer. Forecastin� and plannin�are considered as functionsof mana�ement. Substantially betweenprediction(knowled�e of the future), and plannin�noclearly definedboundaries. We can say thatthe forecastis ainsufficientlydefinite plan, and the plan is arevisedforecast. The most si�- nificant differencefrom the forecastplanis the pres- ence ofelementsin terms ofchoice,decision-makin� andactions forthe implementation of thesedecisions. Forecastin�economic conditionsshould be under- stood asa process desi�nedto assess theprospects of the enterpriseon thebasis of an analysisof market, chan�es in market conditionsin the comin� period.
How tominimize the risks ofreceptionis used- to provide further informationandsu��estsim- provin�the reliability and validityof the initial informationthatwill reduce the likelihoodof in- efficientdecisionmakin�.Methods formore informa- tionsu��estpurchasin�it fromother or�anizations (consultin� firms, research or�anizations). Some authorsconsideran activetar�etedmarketin�as a method forrisk mana�ement, we alsodefined as an activity, intercompany mana�ementsystemthat aims tostudy, takin� into account demandand market re�uirementsfor asoundorientationof enterprisesto producecompetitive products.
Implementation ofmarketin� activitiesis especially importantfor small businessesfor the follow- in� reasons. As a rule,they loselar�e companie- son the costs(as the latter effectsare relationship involved”economies of scale”) and the volume ofavailable financial resources. Therefore,oftenthe main competitive advanta�esin the possessionof small andmedium-sized businesses- it is their- flexibilityand proximity tocustomers, the ability to pay attention toevery client,chan�in�,adaptin� toits re�uirements.Close cooperationwith the customerandprompt response tohis wishesis the maincompetitive advanta�eof small businesses. And in order totake full advanta�e ofthis benefit, you must constantly monitorchan�es in consumer preferences(throu�hmarket research) and desi�n- modificationsof the �oodsin accordance with thew- ishes of thecustomersidentified(by implementin� the marketin� functions). Activetar�etedmarket- in�assumes thatthe companybe�ins to rapidly�en- eratedemand for its products. For this purpose,a variety ofmarketin� methods: market se�men- tationand estimation of itscapacity; Advertisin� campai�ns,includin�fully informedof potential con- sumersand investorsthe mostfavorableproperties of theproducts andthe companyas a whole;analysis of the behaviorof competitors, the development of competitive strate�y, policy and measuresof cost mana�ementetc. Monitorin� thesocio-economic andre�ulatory environmentisoperationalmonitor- in� currentinformation on the socio-economic pro- cesses. To use thismethodre�uires computerre�ula- toryback�round information, connect to networks of business information, carryin� out their ownfore- castin� andanalytical research, contract research, the use of the servicesof consultin� firmsandinde- pendent consultants.
The resultin�data allow us tocatch newtrend- sin relations betweeneconomic entitiesin advanc- eto prepare forre�ulatoryinnovations, the necessary measures tocompensate for lossesfromchan�es in the rulesof business,�uicklyadjust thestrate�ic and tacticalplans.Outsourcin�is realized whena small businessis notable to coverall the lossesof domestic resources.Some of themcan becoated usin�credit. Difficulties in raisin�capitalare not onlyinput, but also a permanentbarrier, which putssmall busi- nessesare oftenonthe brink of survival. In certain situations, it isunprofitable forbanksto takeon more risk. Importantrecent trend-the increased attention- of banks tosmall and medium businesses.The need forsmall businessestocredit resourcesis estimated at$ 30 billionannually, andyetsheis satisfiedby 10-15%. Commercial banksincreasedmort�a�einterest rateto compensate forpossible lossesonloansof no return. Soone ofthe main conditions forthe expansionof credit activityof banksin the small businessisrisk reduction. Conse�uently, the expansion of the time horizon ofsmall business lendin�can be viewedas an impetus forallsmall business sectors. Commer- cial banksin this processobjectivelycan playa ma- jor role.Financin� andloans to small businessesare amon� the instrumentsandthe implementation of economiclevers ofrisk mana�ement practices.The resultshowedthat the consideredmethodsof evasion, transfer, dissipation, compensation, localizationof entrepreneurial riskto a �reater extenthaveor�aniza- tional natureandare thereforeor�anizational method- sof risk mana�ement, as well as in the framework ofrisk compensationself-insuranceisolatedtech- ni�ues, outsourcin�(lendin� financin�) relatin� to economic methods ofrisk mana�ement.
We have consideredthe totality ofrisk mana�e- ment methodsallows you to selectthe most appro- priateoptimal methoddependin� on the�oals and ob- jectivesset by thesmall enterprise, as well as on the prevailin�market situation.Ifthe risk of seriousand poorly understood, it should refuse to accept therisk, ifthis is not possible, you should refer risk toanother person, to distribute amon� partners, to compensate foramore information, outsourcin�, self-insurance.
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