• Financial Institutions

Financial Institutions

Since its inception in 1997, BDO Business Advisory Services Ltd. has been offering a wide range of services to provide clients with wider advice and support than tax, audit and accounting services. Among these are Corporate Finance, Business Restructuring and Share and Business Valuations.

We recognise that no two clients have the same needs or services but discussions with our clients and the wider business community indicate that their needs extend beyond what we currently offer, particularly in the case of financial intermediaries such as banks and leasing companies.

To add value to our product offering, we have developed additional services and combined these with existing ones so as to offer a “menu” of services.

The basis for the enhanced service has been our observations and client feedback that:

  • Financial institutions operating in Zambia could benefit from a greater understanding of the environment in which their clients operate when assessing credit applications, so as to make a more informed decision
  • Companies, while they may offer a high standard of product or service, may lack the project management skills and experience to effectively implement a new investment, whether using internal or external funds
  • Too often, the first a lender learns of an investment failure is when repayments are delayed
  • International and regional financial institutions could enhance the performance of their investment portfolios by calling on expert advice in their client markets
  • Clients with a successful investment record are often more profitable and have a faster track to future finance access.

Service Benefits

The Service will provide benefits to both financial institutions and their client companies:

To financial institutions:

  • Improved loan/lease performance
  • Reduced provisions
  • Higher quality of risk assessment capacity
  • Increased profitability
  • Potential to reduce interest rates

To clients:

  • Improved project implementation and financial management
  • Broadens scope/potential for additional growth opportunities
  • Enhanced credit rating

The Services

Risk Mitigation operates at the loan/lease application review stage and it provides financial institutions with expert and independent advice on:

  • Assessing the proposal in terms of current market trends and competition
  • Client management and technical capacity
  • Assessing projections and cashflow forecasts based on the current business environment and forecasts
  • Specific research where needed

Loan monitoring is offered at the implementation stage. The service provides a regular monitoring service, comprising:

  • Regular site visits to review project progress, including: technical aspects, constraints being faced, changes in market conditions
  • Assessment of financials compared with forecasts
  • Report back: narrative and financial update with recommendations

This service provides the lender with a regular update on the health of the activity for which the loan was provided and with an early-warning system in case of insurmountable problems or possible default. An option in such a case would be for the bank or client to engage BDO to assist the client in overcoming actual or foreseen difficulties.

Our Recovery and Business Restructuring team provides pragmatic and robust advice to lenders, creditors and companies. The aim of Recovery is to help a client work itself out of an underperforming or loss-making situation, while the objective of Restructuring is to avoid a formal insolvency. We offer an array of solutions to help businesses that are underperforming, in crisis or who simply want to ensure they are in a good position for the future. All advice given is strictly confidential.

Our services typically comprise one or more of the following:

Stabilisation: review of short-term cash flow and working capital management

Diagnosis and formulation of options: financial, operation and strategic review, followed by contingency planning

Provision of advice, implementation and monitoring: financial restructuring, re-financing, and debt advisory, followed by performance improvement.

Receivership need not be the end of a company but it may be the prelude to bankruptcy. Depending on the condition of the company, a receivership may be able to bring it back to health. If that is not possible our receivership services will manage a cost-effective, efficient and orderly disposal of assets.