Prior to every loan and facility offered to an SME by Beehive, we carry out a thorough credit assessment to ensure only creditworthy businesses are approved, therefore providing investors with the highest confidence in their investment returns.

We sat down with Fazl Sajid (Saj), Beehive’s Senior Credit Manager, to give us an insight into his role and how the credit assessment works.

Hi Saj, can you walk us through the credit assessment process at Beehive?

Our primary goal is to make sure that we will approve only creditworthy businesses in order to protect our reputation and our investors. Once a business submits their loan application and after the initial screening stage and eligibility checks, the business moves to the credit team for a full assessment.

In the credit assessment, the first thing we do is make sure that all mandatory documents, as per the policy, are obtained and the operations team has input the basic data (including KYC, KYB and bank statement). The credit team will then input the financial statements and risk data points in order to see the position of a business for the final rating. 

We will then run internal and external credit checks. Internal credit checks are mostly for existing clients and external checks include Al Etihad Credit Bureau, a site visit and police cases (if any).

What happens after the internal and external credit check?

Once all the checks are done, the credit department will start the high-level analysis. This includes an analysis of:

1. Legal documents such trade license, MoA, etc.
2. Financial position of the company such as profitability or loss, revenue growth or significant changes in revenue over the last couple of years.
3. Bank statement, as it gives us a clear picture of a business.
4. We may also ask for additional supporting documents from businesses like contract copies, agreements, power of attorney etc.

What do you consider when it comes to decision making?

There are lot of factors when it comes to making the final decision. Some businesses get a good score in the credit model, yet don’t qualify for finance for another reason. Some of the key factors in decision making are:

1. Management experience
2. Current debt exposure
3. Well-managed receivables and payables
4. Cash cover (whether a business has enough bank balance to meet Beehive’s minimum monthly loan repayment criteria)
5. Revenue growth, profitability and margins. The business should also have a valid reason in case of loss making or any significant change in the revenue.
6. Sales cover (the revenue through the bank statement should meet Beehive’s standard criteria. This helps us to compare revenue between the bank statement and income statement)

Since the outbreak of the Coronavirus, are there any additional measures you go to before approving a business?

Yes. We ask clarification and mitigation from clients regarding below key points:

• People / office closure – Can staff work from home?
• Supply chain / supplier – Where are the supplies from? (e.g from China, Europe, etc)
• Customer / project / revenue impact – What’s the impact on ongoing projects? Are there any delayed payments from clients or giving deferment to clients etc.
• Cash conversion risk – How is the company generating cash? Is there any available alternate cash for working capital requirement during COVID-19 period?

If the business is able to provide a valid explanation on the above, then we can proceed.

Do you have any other responsibilities at Beehive?

There are times when I work closely with project team to develop new versions of credit models and policies. I am also involved with the collections team for preparing legal documents.

It seems there’s a lot to do in the credit department! Can you let us know your go-to productivity tricks?

There are lots of elements I work on for self-improvement. Once I reach the office, I prioritize my to-do list to ensure I don’t miss any task. First on my daily task is to keep myself updated about the local and international market trends. Once I start doing an analysis, my total focus will always remain on the business. I make sure I thoroughly check its nature, management, financial position and bank statement behavior. I also take short breaks to refresh myself!

What is the culture like on the credit team?

Our culture is very simple and transparent. Everyone has positive values such as beliefs, attitude, and behavior. The whole Beehive team has a common goal and we always support each other, which is why everyone is delivering tasks tremendously well.

What do you enjoy doing after work?

I just love spending time with my family at home after work!