BSC: “It is necessary to establish horizontal relations between credit employees and the borrowers”

15.02.2011 | 01:49 Home / News / Articles /
Interview “BSC Business Support Center” Training and Consulting Company Shareholder-Director Samvel Gevorgyan to Mediamax Agency and Banks.am portal 

- Recently, you have started more frequently voicing the opinion, according to which the expenditures for the personnel have begun to be perceived by the heads of private companies not as expenses, but as investment into human capital. Maybe, this opens up new opportunities for training companies?

- Yes, it does, but with one reservation: this concerns 20% of business structures in Armenia.  

Our marketing research, as well as my personal contacts with heads of private companies evidence that for employers, who have started reckoning with competition manifestations, and, as a result, the demands of their customers, the expenses for personnel training have begun to be perceived as investment into the stable development of the company. 

The remaining 80% are yet guided by the following approach: if the employee partially does not meet the established criteria, he/she can be fired and a new employee can be hired. At first glance, this part of the employers chooses the shortest and the easiest way to solve the problem. But by taking this path, they spend resources and time, exposing themselves to certain risks, since there are no guarantees that the new employee will be better. 

Of course, there are also objective reasons for such an approach: the general economic situation, the level of competition tension in a particular sphere, limitation in financial resources, etc. At the same time reassuring is the fact that the mentioned 20% already “make a change”, introduce new quality in the market, which, in the course of time, will become contagious and will pull up the remaining part.     

Our contacts with one of the supermarkets in the capital city are a proof of what has been said. In the course of a few years we turned to them with the offer to organize trainings, which, however, were turned down. As a result, they were the ones to express a wish to cooperate with our companies, at that not only due to our consistent marketing work, but more due to the competitive environment, in which they found themselves. And to the greatest extent this was conditioned by the striving to increase the quality of customer services. 

- What is the stance of heads of financial-credit establishments towards this problem? 

- In the course of 17 years of our company’s history, the year of 2010 was the most successful in terms of involvement of banking employees in training programs. At that, the most demanded were trainings on increasing customer service quality. In total, last year over 200 banking employees participated in corporate and open trainings of “BSC”, and this figure significantly exceeds the indices of 2008-2009. Encouraging is the fact that this index possesses the tendency of growth. 

The necessity of professional growth among employees is being realized by credit organizations as well, which today have to compete not only among each other, but also with commercial banks. 

At that, among banks and credit organizations there are still ones, which do not hurry to make investments into the personnel. They, as a rule, have a vertical scheme of work with customers, when the customer is considered a subordinate, and the credit employee acts like the manager. 

Using the occasion, I would like to note that since April we are launching specialized training courses for credit specialists of banks and credit organizations. 

- In the beginning of last year you noted that CTP would create new business opportunities for you. Were those expectations justified? 

- In the process of preparation for CTP implementation, insurance companies of the country were busy mainly with solving technical tasks, which for a certain period delayed our plans of stirring up cooperation with the insurance market. But, anyways, there are already ready products for our companies in our portfolio, which we will promote from the second half of February after the expected decline of the stir, caused by sales of policies. 

In this direction we closely cooperate with the Armenian Association of Insurers and plan to make a detailed presentation of training programs for insurance companies in the nearest future. At that the emphases will be put not only on CTP. 

- What was the factor to condition “BSC” Company’s initiative to elaborate model business plans for SME representatives? 

- The offered samples of business plans are meant for competent planning of entrepreneurship activity, risk management and realization of the financial analysis of the company’s activity. These are the stances, which the majority of small and medium enterprise representatives, who act as potential borrowers of banks and credit organizations, reckon with. 

The entire problem is in the fact that in the process of receiving credit means, representatives of SME are guided by a momentary approach, without realizing that the credit is a tool for servicing a particular business in a long-term prospect. In other words, when a credit is received, ordinary accounting is realized, meanwhile the credit needs a serious financial analysis and competent management. 

Let’s imagine a situation, when credit means at the volume of USD 15 thousands are required for a SME entity. The first it pays attention to is the low interest rate and the long term of the credit. Of course, it will take interest in the volume of the credit as well, and if it is established, for instance, within the range of up to USD 30 thousands, believe me, the majority of the borrowers will choose the maximum size of the credit. 

Besides, often SME representatives consider a credit agreement a dummy paper, necessary to receive credit resources. However, it may contain provisions, which, even given the most auspicious terms of the credit, may further on become a heavy load for the entrepreneur. 

- But often SME representatives do not even have the chance to choose… 

- I agree, but if the credit application of a particular applicant is turned down, especially if it is turned down simultaneously by different credit establishments, this means there is something wrong. Maybe the reason is the incompetent business proposal? Maybe this will give a chance to further on avoid bigger problems? 

It is not ruled out that in individual cases, financial-credit establishments are the ones to try to minimize their risks, often minimizing to zero level. But, you should agree that given a competent business proposal, an alternative can always be found, at that not only in terms of choosing a “convenient” creditor, but also by means of searching for a most fitting financing tool. Why not, for instance, use leasing or factoring in cases, when it is applicable? 

- What if the customer finds it difficult to see the difference between a classic business credit and for instance, leasing? 

- We again return to the conversation about the necessity to establish horizontal relations between credit employees and the potential borrower. The employee of a credit establishment should carry out interactive work with the customer, and, if the application is more suitable for registering leasing, reveal all subtleties of this product. 

In this context, a weighty role belongs to training companies. Realizing that training services are unable to reveal the entire sphere of SME, we have tried to address a maximum wide audience by means of the book “How to Start Own Business in Armenia” in fall, 2010. In the book we tried to give answers to questions, which may occur among beginning and already functioning entrepreneurs. And by the way, among them are optimal sources of business funding. 

- Don’t you think that by discussing the problems of small and medium enterprise, we leave the representatives of micro-business in the shade? 

- No, since it is very difficult to draw a division line between micro- and small business in our reality. And, nevertheless, our company is elaborating point products, aiming concretely at micro-crediting organizations. At that, this work is carried out both in autonomous order, and within the framework of exclusive cooperation with Dutch Consulting Company “Triodos Facet”  

In particular, jointly with the Dutch partner, today we carry out elaboration of training modules on organizing internal procedures of micro-credit organizations’ activity. Besides, we already have ready training programs also in terms of servicing customers in micro-crediting organizations, which we will put into operation in the nearest future. 

- “BSC” has always used open marketing tools for presentation of its services. Since recently, you have launched also thematic portal Trainings.am with detailed description of training courses for half a year ahead. Doesn’t this fact create auspicious grounds for plagiarism of ready solutions? 

- If we speak of the problem from the legal point, today we often face actions, which hurt one’s reputation and the rating of the market of training services in Armenia, and, at the same time, mislead the potential customers. All those provisions are quite distinctly outlined in the law on “Protection of Economic Competition” and provide for responsibility for carrying out unfair competition. 

But there is another – moral side of the problem, which is not described in any law. But, I believe, this is a topic for a different conversation. 

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