Prior credit assessment of long-term SME projects with non-standard cash flows

Over the past three decades, relative bank loan demand has changed due to arising small and medium-sized enterprises (SMEs). Therefore, banks in their operations face problem of processing an ever-increasing number applications. The aim this paper is develop auxiliary approach assessing prior creditworthiness long-term SME projects with nonstandard cash flows.This study reveals how principles value-based management can be incorporated into process borrower’s assessment improve screening For this, internal rate return was used as a criterion for granting decision at initial stage underwriting.An algorithm preliminary evaluation applications proposed based on principle maximizing shareholder value banks. This helps define credit terms taking consideration distribution positive flows throughout project’s expected economic life, calculate possible real effective interest concerning flow schedule, make rough analysis efficiency lending state necessary initiate procedure underwriting schedules. estimation stemming from IRR-approach also initially by borrower tool solvency self-testing via periods corresponding that servicing.