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SME Succession Planning – A Key Element in Risk Assessment

LinkedIn Group: SME Finance in Emerging Markets discusses the importance of succession planning in risk assessment of SMEs.  Tejas Parikh from Mumbai raised the question:  “SME entities generally do not have proper succession planning. Does it restrict access to long term finance.”

BIIA’s managing director Joachim C Bartels commented: Succession planning plays a key role in risk assessment of companies, especially when considering Basel II criteria. It is linked to the assessment of the competence of management. The ease of which some SMEs change business models / business activities plays also a role. That brings into question the skill level and competence of the entrepreneur. Since the entrepreneur is often the sole driver of the business, yes succession planning is well on the mind of credit grantors.”

BIIA Newsletter October II – 2010 Issue

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