Mise en place d'une méthodologie de calcul des provisions et réductions de valeur à comptabiliser sur les prêts subordonnés à la Sowalfin

Abstract

Since its creation in 2002, SOWALFIN has been facilitating access to finance to the SMEs in Wallonia, and has given them the opportunity to realize or complete their projects by providing solutions to their financial needs at key moments in their existence. One of these solutions is the granting of subordinated loans as a complement to bank lending. These subordinated loans concern companies in the creation, development or transfer phases. The amount of the credit varies from €25,000 to €350,000 and SOWALFIN benefits from a bank guarantee of 1/3 of the amount of each loan. Financing activities are subject to credit risks that should be controlled by the company and reflected in its financial account in order not to jeopardize the company’s survival. These risks are covered through a provision for risks and charges and impairment of some specific assets. The willingness of SOWALFIN is to set up a methodology for calculating provisions and impairments more related to the risks to which it is exposed. In 2013-2014, SOWALFIN developed a risk scoring system which may be used in the methodology. The title of the project is: “The establishment of a methodology for calculating provisions and impairments to be recognized on subordinated loans at SOWALFIN”. Several steps are necessary in order to realise this mission. Firstly, the realization of sector analyses in order to identify risks specific to each sector treated at SOWALFIN. This step allows classifying loans in portfolios in terms of the probability of default. Secondly, the assessment of the relevance of this sector analysis and of the credit scoring system in the risk of a company’s default. Thirdly, the analysis of the outcome of loans with specific risks (loans in judicial reorganisation procedure, loans with moratorium and with payment delays). The final step consists of the establishment of a methodology based on the sector risk analysis, on the individual risk identified through the credit scoring system, and on the specific risks. Carrying out these four steps will enable SOWALFIN to account for provisions and impairments representing the credit risks to which it is exposed.