Improving Turnaround Time of Doha Bank's SME Lending Model 2018

This project focuses on improving the turnaround time of Doha Bank's SME lending model. It begins with an introduction highlighting the importance of SMEs and Doha Bank's role in supporting them. The project identifies the problem of delayed turnaround times, leading to customer dissatisfaction and financial losses. A SWOT analysis is conducted, and the theoretical framework explores policy and procedures, employee productivity, and time management. The project's objectives include analyzing the current situation, revising policies, improving employee productivity, and optimizing time management. The study uses techniques like cause-and-effect analysis and time-motion studies to identify inefficiencies. The project proposes a new program lending model, revisions to policies and procedures, employee training, and the implementation of turnaround time targets. The discussion highlights the components of the project, recommendations, and the potential for increased efficiency and customer satisfaction. The project aims to provide effective strategies to reduce turnaround time, increase productivity, and enhance the bank's SME lending performance.

IMPROVING TURNAROUND TIME OF DOHA
BANK’S SME LENDING MODEL
2018

IMPROVING TURNAROUND TIME OF DOHA BANK’S SME
LENDING MODEL
IMPROVING TURNAROUND TIME OF DOHA BANK’S SME
LENDING MODEL

TABLE OF CONTENTS
List of Tables.............................................................................................................................7
List of Figures ...........................................................................................................................7
List of Abbreviations.................................................................................................................8
Chapter 1..................................................................................................................................11
INTRODUCTION...................................................................................................................11
1.1Background ....................................................................................................................11
1.2Project..............................................................................................................................11
1.3Significance of the study.................................................................................................12
1.4Methodology ..................................................................................................................12
1.5Limitation........................................................................................................................13
1.6Chapter Framework.........................................................................................................13
Chapter 2..................................................................................................................................14
PROBLEM IDENTIFICATION..............................................................................................14
2.1 Introduction....................................................................................................................14
2.2 Organization Profile.......................................................................................................14
2.2.1 Small and Medium Enterprise (SME) Section at Doha Bank.....................................16
2.3 Organizational Analysis: SME Section at Doha Bank...................................................16
2.3.1 SWOT Analysis: SME Lending at Doha Bank.......................................................16
2.4 Problem Identification....................................................................................................19
2.5 Problem Description.......................................................................................................20
2.6 Summary .......................................................................................................................24
Chapter 3..................................................................................................................................25
THEORETICAL FRAMEWORK FOR DIAGNOSIS............................................................25
3.1 Introduction....................................................................................................................25
3.2 Theoretical background to the problem.........................................................................25
3.2.1 Policy and Procedures ............................................................................................28
3.2.2 Employee Productivity ...........................................................................................29
3.2.3 Time Management ..................................................................................................30
3.3 Framework of the study..................................................................................................31
3.4 Description of the Techniques........................................................................................31
3.4.1. Cause and Effect analysis.......................................................................................31
3.4.2. Time and motion study ..........................................................................................32
3.5 Summary........................................................................................................................32
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Chapter 4..................................................................................................................................33
THE PROJECT........................................................................................................................33
4.1 Introduction....................................................................................................................33
4.2 Project Objectives..........................................................................................................33
4.2.1 The Prime Objective................................................................................................33
4.3 The Project; Project Components...................................................................................34
Source: Author .................................................................................................................34
4.3.1 Component 1: Current situation analysis ..............................................................34
4.3.1.1 Cause and effects analysis....................................................................................36
4.3.1.2 Kipling’s Method..................................................................................................36
4.3.2 Project component 2: Policy and Procedures.........................................................37
4.3.3 Project component 3: Employee productivity ........................................................42
4.3.4 Project component 4 : Time Management...............................................................43
4.4 Resource Allocation.......................................................................................................44
4.5 Cost Estimates and Cost Benefits ..................................................................................46
4.6 Project output and outcomes..........................................................................................47
4.7 Project plan.....................................................................................................................48
4.8 Summary........................................................................................................................49
Chapter 5..................................................................................................................................50
DISCUSSION OF IDENTIFIED COMPONENTS................................................................50
5.1 Introduction....................................................................................................................50
5.2 Discussion .....................................................................................................................50
5.2.1 Current Situation Analysis.......................................................................................51
5.2.2 Policy & Procedures................................................................................................52
5.2.3 Employee Productivity............................................................................................52
5.2.4 Time Management...................................................................................................53
5.3 Recommendations..........................................................................................................53
5.3.1 Introduction of new Program Lending - Automated Lending processes ................53
5.3.2 Periodical update of policy and procedures.............................................................53
5.3.3 Training and Development of SME employees......................................................54
5.3.4 Turnaround Time implementation for processes ....................................................54
References ...............................................................................................................................55
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iii

List of Tables
Table 2.1: Doha Bank’s Financial Highlights……………………………… 6
Table 2.2: Doha Bank’s Ratio Highlights…………………………………... 6
Table 2.3: SWOT Analysis: SME Lending at Doha Bank…………………. 8
Table 2.4: Problem Identification Diagram………………………………… 11
Table 2.5: Average Turnaround Time Delays……………………………… 12
Table 2.6: Existing Loans and Customers…………………………………. 13
Table 2.7: New Projects and Customers……………………………………. 13
Table 2.8: Income Statements………………………………………………. 13
Table 2.9: Application Processing…………………………………………. 14
Table 2.10: Numbers of Complaints…………………………………………. 14
Table 2.11: SME Complaints Details………………………………………... 15
Table 2.12: SME complaints and Impacts……………………………........... 15
Table 4.1: Project Components and Techniques……………………………. 15
Table 4.2: Current situation analysis tools…………………………………. 26
Table 4.3: Kipling’s Method………………………………………………... 26
Table 4.4: 5 Why……………………………………………………………. 30
Table 4.5: Loan process - workflow Chart…………………………………. 31
Table 4.6: Policy and Procedure Amendments……………………………. 32
Table 4.7: SME program lending model……………………………………. 34
Table 4.8: Turnaround Time vs Loan Process stages……………………… 36
Table 4.9: Time and motion study Loan process workflow………………... 36
Table 4.10: Resource allocation of project…………………………………... 38
Table 4.11: Cost Estimates…………………………………………………... 39
Table 4.12: Cost Benefits……………………………………………………. 40
Table 4.13: Project output /outcomes………………………………………... 40
Table 4.14: Project Time Planners…………………………………………… 42
Table 5.1: The 5W +1H…………………………………………………… 48
Figure 3.1 Study Framework………………………………………………... 23
Figure 4.1 Ishikawa diagram…………………………………....................... 28
Figure 4.2 Project Team Structure…………………………………………. 38
List of Figures
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List of Abbreviations
SME Small and Medium Enterprise
GCC Gulf Cooperation Council
ATM Automated Teller Machine
UAE United Arab Emirates
CSR Corporate Social Responsibility
DB Doha Bank
IT Information Technology
RM Relationship Manager
HR Human Resources
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Acknowledgements
I extend my sincere gratitude to all who have contributed in numerous ways and supported
me in my Management Field Project to make it a reality. My Project Supervisor Dr. A.K.L
Jayawadana for his valuable guidance and support extended throughout this project. I would
also like to extend a sincere and heartfelt gracefulness to the Director PIM Professor Ajantha
Dharmasiri for endless support. My heartiest gratitude is also extended to all PIM lectures for
the advice and guidance given for successful completion of this management field project.
All faculty guides of PIM who have added invaluable knowledge and extended continuous
encouragement and guidance throughout the MBA programme. All management and
administration staff at Postgraduate Institute of Management for providing me the
opportunity to pursue this course of study.
My friends, colleagues from various banks who responded to my queries and assisted me to
complete this project successfully. Last but not least my sincere gratitude goes out to my
family for being my greatest inspiration and strength in my accomplishments and
encouraging me to pursue this MBA programme. The MBA gives me a great sense of
satisfaction and accomplishment of a lifelong ambition.
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EXECUTIVE SUMMARY
In the current era, Small and Medium Enterprises attract Banks all over the world, to a
greater extent. It is with an aim to increase the market share and revenue. Nevertheless, Doha
bank SME unit reflects a lower performance. The aim of this management field study project
is to reduce/minimise the turnaround time of Doha bank’s small and medium lending process
model. Doha bank is one of the largest private banks in the State of Qatar and has expanded
all across the Gulf and Asian region. Small and Medium unit of Doha bank deals with all
SME loan requests through a centralized operational system that covers a worldwide
network. This project has intended to conduct a deep analysis of Doha bank’s existing SME
lending model and re-introduce the Program lending model for better enhancement.
Primary study is focused on Doha bank’s SME unit perception and approach in handling
SME lending. This has revealed several numbers of inefficiencies, unit’s internal structural
weaknesses as some key concerns that has led to a depriving growth of SME’s. The SME
operational lending model fails to satisfy the standard turnaround time. As a result, bank
encounters numerous issues of customer delay, complaints, loss of potential clients who
prefers opting the services of competitors and inter related income/revenue losses.
The findings of this management Field Project study has exposed the small and medium
operational lending system of Doha bank which is to be re designed for overcoming the
identified problems, supported by effective solution. The project recommendations are
mainly with reference to introduce a Program Lending Model to Doha bank’s SME lending.
The budget or cost related issues can be overcome with the use of internal resources for
creating a new software, adding into the main system of bank. Recommendations have
evolved the need of revising the existing policy and procedures to improve employee
productivity via effective sessions of training & development. It has also depicted some vital
considerations related to the implementation of turnaround time in all related activities of
SME lending procedures to overcome the issues of time management.
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CHAPTER 1
INTRODUCTION
1.1 Background
SMEs play a critical role in innovation, advancement and sustainable development, at a
worldwide level. In today’s increasingly globalized world, the SMEs that are operating all
around the world are unprecedentedly required to compete, globally. Doha Bank was the first
bank in Qatar to understand and appreciate the importance of a critical role played by SMEs
in the development of Qatari economy. In view of this, Doha Bank became the first bank to
launch ‘Tatweer’, a dedicated SME unit in 2008.The infrastructure development taking place
in Qatar in the form of ports, roads, airports, rail, telecom, other utilities and construction
activity are in requirement of support from SME businesses. Doha Bank thus aims to make
an active participation in Qatar’s diversification story by encouraging the SME sector. In
today’s highly competitive environment, speed of delivery and excellent customer service
plays a pivotal role in the success of any Bank. Our main problem starts from such aforesaid
point itself, Doha Banks are not providing the required speed of delivery in terms of
enhancing the level of satisfaction in users. It is facing delay in the Turnaround Time of SME
Lending processing model. Such delays have resulted in losing both new and existing
customers, who are highly potential with an increasing complaint. This has in turn led to
create a negative impact on Bank’s image with loss of interest/commission income and
reduction of lending portfolio. Lastly, it has also resulted in the down fall of bank’s
profitability while lending the SME’s.
The overall project has studied and realised Bank’s financial issues and market challenges
faced by the entities working in small to medium sector. This project has aimed to provide a
new program lending model for small and medium enterprises. It has intended to identify a
new program lending model that will provide solutions to overcome the current delays in
turnaround time. Recommendations will be given to improve the turnaround time and
improvise the small and medium scale market for operating with effective work strategies
and succeed in the market.
1.2 Project
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The management field project undertakes providing recommendation to reduce or minimize
the delays in turnaround time of small and medium lending process, operated by Doha bank.
This project mainly focusses on to the reasons behind delays in Turnaround Time of SME
Lending processes. It has also studied the issues existing in other wards using bank’s SME
lending operational model. The prime objective is to establish suitable SME lending
operational model which will meet the current market requirement of speedy delivery. In
addition to this, project will also concentrate on the identification of constrains in Bank’s
policy & procedures. Necessary recommendation will be made to amend the bank policy &
procedures for meeting the current market requirements, complying with bank’s compliance
framework. Further in order to address customer’s complaint issues against SME lending
process, employee’s productivity is also needed to be reassessed. A set benchmark on the
expected standard of productivity will be created and evaluated with assistance of continuous
monitoring. Time Management or Analyzing the time GAP in SME lending process is also
one of key aspect of this project. This will help in identifying the exact steps in the formation
of a clear map to ascertain time delays in SME lending process. Such information is vital to
create a suitable SME lending operational model.
1.3 Significance of the study
The significance of this study is in terms of finding out certain effective strategies that are
required to reduce the turnaround time of lending process as a way of increasing productivity
without negatively impacting the procedural steps. Implementing new process and
technological practices are thereby expected to increase both productivity and capacity. Due
to delays in Turnaround Time of SME Lending processes, the bank has suffered huge direct
and indirect losses in terms of reputation, customer complaints, loose of potential customers,
dealt with a negative lending growth and low % of profits in SME lending. All these issues
are expected to be addressed positively, through this project. Business challenges such as
reduced turnaround time, improved productivity in terms of lending loans per person/per day,
enact changes with no negative impact on accuracy will be resolved and can be treated as an
advantage of this study. Revision of bank’s policy & procedures to match the current market
trend will resolve the issues that are being faced by the SME’s while lending funds and
remove the barriers to positively impact on SME Lending portfolio. This is expected to lead
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into an increased growth of bank’s commission income, interest income as well as
profitability. Further, employee productivity assessments are also expected to be more
significant. Whereas, the assessment outcome will clearly identify the GAP’s in employee
productivity and will provide a great insight for improvements by considering alternatives
measures to boost up employee productivity.
1.4 Methodology
Initially, SWOT analysis will be done to ascertain the current situation of Doha Bank’s SME
Lending processes. This will assist in the identification of their strengths, weaknesses,
opportunities and threats. Depending on the acquired outcome of SWOT, the influencing
issues and the causes that is resulting in causing delays in the Turnaround Time of SME
Lending processes or SME Lending operational model will be identified. The Cause and
Effect analysis will be used as a technique to find out the reasons behind the problem.
Fishbone diagram is also referred to be yet another effective analytical tool. By using the
fish-bore diagram, it will be possible to determine the problems that are prolonging the SME
Lending process. Time and motion study will together be used to change and update the
undertaken work frameworks. Such a coordinated way to deal with the change in work
framework is known as strategy engineering. At the end, through the identified techniques, a
suitable solution with recommendations will be provided against the components. It is to
further put forward, a highly productive model of SME Lending processes as a solution to the
identified problem.
1.5 Limitation
Time limitations, Information accuracies and company secrecy concepts were found to play the role
of limiters in this project.
1.6 Chapter Framework
Chapter Two will discuss about the profile of selected organization to further analyse its key
issues and problems and finally describe the same with data linked to the selected
organization.
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Chapter Three will discuss the theoretical background of the problem with extensive
literature reviews, framework of the study and a detail of description of the identified
techniques.
Chapter Four will discuss the SMART objectives of the project, theoretical framework of
project components, resource allocation, cost estimates, project outputs and outcomes.
Finally, the project plan which involves the time plan will be discoursed, with another aspect
of monitoring the same.
Chapter Five will discuss about the implementation of project with recommendations and
some of its variations including projected delivery and time. Lastly, the issues in project
implementation will also be discussed over here.
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CHAPTER 2
PROBLEM IDENTIFICATION
2.1 Introduction
This chapter will discuss the key issues of identified problem which is going to be studied by
the author. With regard to said study and review process, company will be subjected to
SWOT and PESTEL analysis in detail and driven to a realistic conclusion. Moreover, the
identified problem/issues will be linked to the organizational performance such as profit
/losses, revenue and other inter related activities to find out the impacts /gaps. Moreover,
findings will be under a detailed analysis in order to know the root cause of issue identified
by author.
2.2 Organization Profile
Doha Bank is one of the largest commercial banks in the State of Qatar and has been
consistently registering strong growth during the last decade with participative leadership
philosophy. Inaugurated in 1979, Doha Bank provides domestic and international banking
services for individuals, commercial, corporate and institutional clients through four business
groups i.e., Wholesale, Retail and International Banking and Treasury & Investments. Doha
Bank has been in operations for more than 38 years and having 27 domestic branches, 9 e-
branches including pay offices, 1 active mobile branch and more than 110 ATMs as on 30th
September 2017. The bank has expanded its business overseas with branches in UAE (Dubai
& Abu Dhabi), Kuwait and India (Mumbai, Cochin and Chennai). In addition, we have
representative offices in Singapore, Turkey, Japan, China, United Kingdom, Canada,
Germany, Australia, Hong Kong, South Korea, Sharjah (U.A.E.), Bangladesh and South
Africa. Doha Bank has received numerous awards in recognition of its achievements. Doha
Bank was adjudged as the ‘Best Regional Commercial Bank’ – The Banker Middle East for
the 5th straight year. Doha Bank was recently awarded as ‘Bank of the Year – Qatar
Domestic Trade Finance’ by Asian Banking & Finance. Additionally, Doha Bank has in the
past claimed various other awards such as ‘Bank of the Year’ – The Banker, ‘Best
Commercial Bank in the Middle East’ – Global Banking & Finance, ‘Bank of the Year’ –
ITP Group, ‘Best Bank in Qatar’ – IAIR Award and ‘Best Bank in Qatar’ – EMEA Finance.
In recognition of being one of the most active advocates of Corporate Social Responsibility
(CSR) through initiatives such as ‘ECO-School Program ‘Al Dana Green Run’, beach
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cleaning, tree planting etc., Doha Bank has won the ‘Environmental Award’ from The Arab
Organization for Social Responsibility as well as ‘Golden Peacock – Global Award for
Sustainability’ from the Institute of Directors. Doha Bank is rated A by Fitch, A2 by
Moody’s and A- by Standard & Poor’s for its long-term local and foreign currency. Bank’s
sustainability in terms of financial performance is well proven in the past results which have
evidenced strong year on year growth of the balance sheet and profit & loss account. Such
performance of course relies heavily on all of Doha Bank’s sustainability measures in
creating long term opportunities for all stakeholders whilst delivering superior returns to
shareholders. Table 2.1 provides the financial highlights and Table 2.1 gives ratio analysis of
Doha Bank.
Table 2.1: Doha Bank’s Financial Highlights
Key Figures 2015 (QAR MN) 2016 (QAR MN) 2017 (QAR MN)
Total Assets 83,289 90,365 93,495
Net Loans & Advances 55,595 59,186 59,804
Customer Deposits 52,767 55,730 59,468
Total Equity 13,187 13,381 14,807
Net Profit 1,354 1,054 1,110
Source: Doha Bank Sustainability Report 2017
Table2.2: Doha Bank’s Ratio Highlights
Key Ratios 2015 2016 2017
Return on Shareholders’ equity 15.9% 12.1% 11.9%
Return on Average Assets 1.7% 1.21% 1.21%
Total Capital Ratio 15.73% 15.57% 17.51%
Shareholders Equity to Total Assets 15.8% 14.8% 15.8%
Net Loans to Total Assets 66.7% 65.5% 64.0%
Net Loans to Total Deposits 105.4% 106.2% 100.6%
Source: Doha Bank Sustainability Report 2017
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30% cash dividend proposed for 2017 to shareholders. This has consistently provided one of
the highest dividends yield in Qatar. The highest Net Interest Margin in the Qatari Banking
industry as of 31 Dec 2017 has been found to rise by 205%. One of the highest Returns on
Average Equity in the Qatari Banking industry as on 31 Dec 2017 has been recorded to be
11.9%. Provision coverage of 125% and 185% included the risk reserve as on 31 Dec 2017.
Very well diversified loan mix and a diversified deposit and funding base has been confirmed
by these above findings. It has also depicted a significant part of investment portfolio in the
local sovereign.
2.2.1 Small and Medium Enterprise (SME) Section at Doha Bank
Doha Bank was the first bank in Qatar to understand and appreciate the importance of critical
role played by SMEs in the development of Qatari economy. In view of this, Doha Bank has
become the first bank to launch “Tatweer”, a dedicated SME unit in 2008. The SME section
contributes substantial amount towards revenue of Doha Bank’s operations. Infrastructure
development taking place in Qatar in the form of ports, roads, airports, rail, telecom, other
utilities and construction activity requires the support of SME businesses. Doha Bank aims to
actively participate in Qatar’s diversification story by encouraging the SME sector. Doha
Bank has already assisted over 500 SME customers with credit lines more than QAR 1.5
billion to date. Doha Bank firmly believes that today’s SMEs are the emerging large-cap
companies and already have several success stories to boast of. The success stories created
by Doha Bank have encouraged other SME customers to approach Doha Bank for various
financing solutions. Despite new entrants in the market and stiff competition from local and
international players, Doha Bank continues to be the Banker of First choice for SME
customers. These customers hold Doha Bank in high esteem which speaks volume of their
satisfaction level as the complete range of products and services are available under one roof
along with a team of dedicated Relationship Managers and Credit & Risk Management team.
2.3 Organizational Analysis: SME Section at Doha Bank
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2.3.1 SWOT Analysis: SME Lending at Doha Bank
Small and Medium Sized Enterprise (SME) lending is Author’s focus of study, Table 2.3
shows SWOT analysis of Bank’s Small and Medium Enterprise Unit.
Table2.3: SWOT Analysis: SME Lending at Doha Bank
Strengths First Private Bank to Introduce SME banking
Broad range of Product offerings
Dedicated Relationship Managers
Largest Branch Network country wide
One of the biggest Lender in Qatar by market value
Already served more than 1000 SME customers
Awarded the Golden Peacock Global Award for Sustainability
More revenue generation via wide range of unmatchable products
Weaknesses Reluctance to lend predominantly owing various internal reasons
More restrictions on non-secured lending
Long delays in loan processing
High transactional cost involved
Lengthy and confusing approval systems
Low training hours or not enough training on SME
Opportunity High market opportunities
Huge need for products and services
Long standing customers
Lower cost lending
Threats Increasing Competitors in SME banking sector
Introduction of similar product range from Competing Banks
Confusion over cultural restrictions in new business
Too much regulatory requirements
Willful Default risk and Gulf crisis
Source: Author
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2.3.1.1 Strengths
The Table 2.3 clearly explains and reflects that Doha Bank is having an edge over its
competitors due to the first bank to enter Small and Medium Banking sector industry.
Whereas, its strong presence in Qatar as the largest lender in terms of market value and large
network of branches country wide gives them a great advantage over others. Doha Banks
wide range of product stands as the main competitive advantage from its rivalry Qatar banks.
Finally, Doha Bank’s sustainable growth through last 30 years in the Banking Industry and
the world-wide foot print gives an added advantage and support to their Small and Medium
Banking sector non- other than any other financial institution in State of Qatar.
2.3.1.2 Weaknesses
Challenges in administration, regulatory issues, lack of information, no financials and not
adequate collaterals are main weaknesses. In addition, delays in long processes is mainly due
to weak operational modules and poor credit scoring systems. In other words, complex and
prolonged approval process are being practiced at Doha Bank. Even though bank is having
Relationship Manager to deal with the business relationship of SME clients, inadequate
training and understanding of industry and business within Bank SME unit can be seen more
openly. As a result, more attractiveness of customers towards bank as expected from the
industry prospective.
2.3.1.3 Opportunities
Infrastructure development taking place in Qatar in the form of ports, roads, airports, rail,
telecom, other utilities and construction activity requires support of SME businesses. Doha
Bank aims to actively participate in Qatar’s diversification story by encouraging the SME
sector. High return over corporate lending, Lessor allocation of Capital and Accessibility to
low cost funds create more and more opportunities for the bank to lend to Small and Medium
Sector. SME boost initiative by State of Qatar is seen as a great opportunity to small and
medium sector. Government policy of economic diversification will have a huge impact on
SME growth.
2.3.1.4 Threats
A mandatory collateral requirement makes the small and medium lending to lower attraction.
Competitor threats are challenging. Most of the new entrances come up with the similar
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range SME products and services. Further, the recent Gulf crisis and continuing instability
has led more Risk Man and defaulters due to non-availability credit line like before and no
material availability or increase in cost of production. This leads to SME units to take extra
care on their non -secured lending. Adding more pressure, the Central Banks and regularities
pressure on banks to stream line the lending will also affect industry to a certain extent.
2.3.1.5 Conclusion of SWOT Analysis
The SWOT analysis shows Banks weaknesses than the Strengths but more opportunities than
threats in the industry. Credit risk assessment and operating costs are identified in small and
medium have been found to be at a weaker side. No or poor strategy has been found
preventing Bank’s SME units, that has led to an increased exposure of credit. Retail and
corporate regulatory restrictions and investment risks make SME as the newest target
opportunities for banking sector. SME business will make a reasonable impact on banks, if
they use them strategically. SME is still highly profitable sector in the banking industry.
SME lending growth in bank will be possible only if they introduce a speedy approval
process so banking will become more restriction and requirement free and profitable. Most of
the financial institutions failed to make efforts to groom good SME relationship managers to
boost bank’s SME portfolio. No data availability or saved information, lack of wide range of
products and no systematic operational model are the weaknesses. Banks will succeed if they
learn and understand the SME’s business qualitative elements and financial data. SME will
be in trouble in absence of accurate and reliable data. Main elements preventing small and
medium growth is identified as little or no adequate information to justify facility and bank’s
internal system’s weaknesses.
2.4 Problem Identification
The following issues are identified as main obstacles for Doha Bank’s Small and Medium
Lending growth.
i. High handling cost
ii. Weak SME operational process (Operation Model)
iii. Poor Credit/Risk assessment systems
These issues are creating several other interrelated problems to Doha Bank directly and
indirectly such as revenue losses, increasing cost and most importantly, negative image for
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the highly reputed Bank. These can be categorized under process and people, cost and
technology related issues. The weaker SME operational process or model used in bank is
seen as a main reason for most of the issues that bank’s SME division faces. Weaker
operational processes are mainly affecting the standard turnaround time in serving a customer
or client related applications. This will lead to other problems to the bank and its customers.
Therefore, weak SME operational process (Operational Model) will be discussed as Doha
Bank’s key problem to small and medium lending unit and its growth. Doha Bank has failed
or yet to address the SMEs operational process weaknesses. As a result, reputational image of
the bank in the banking industry has fallen drastically. Due to huge delays and dissatisfaction
of external customers, bank has lost quiet a number of good net worth and potential
customers as well.
The Problem Selection: Turnaround time Delays in SME operational process (Operational
Model)
2.5 Problem Description
The key issues and problems can be categorized under 03 aspects and explained in Table 2.4
relating processes, people and technology.
Table: 2.4 Problem Identification Diagram
Category Problem Outcome
Process & Policies related Customer Complaints
People related Poor Turnaround
Time
Customer Delays
Technology related Loss of Customers & Income to
bank
Source: Author
This Field Project will be focusing on SME operational processes or Operational Model used
by Doha Bank’s SME Lending Unit. Doha Bank’s SME unit activities are fully centralized
and totally handled by SME processing unit located at Bank’s Head Office Towers.
Branches are merely act as sales outlets and customer service centers under the new banking
& sales-oriented concept. At initial stages, bank’s SME operational processes or model used
do not create any critical issues mainly due to low customer and transaction volumes. In
order to increase the customer base of SME Bank’s and its transaction volumes started to
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pop-up daily issues. Now bank is at a stage where it has no other options remaining rather
resolve it or forgo its reputational image and lose value and potential Small and Medium
business enterprises in the gulf region. Table: 2.5 will clearly elaborate the current
Turnaround time delays in Doha Bank regional wise and overall bank wise.
Table: 2.5 Average Turnaround Time Delays
Doha Bank
Regional Offices
Pending Loan
Requests
Average
Turnaround Time
Delays
Overall Average
Turnaround Time
Delays
Ad-Dawah 20 6 Weeks
Al Dayne 15 6 Weeks
Al Khor 12 8 Weeks 6.5 Weeks
Al Rayyan 9 7 Weeks
Al Shamal 20 8 Weeks
Al Wakrah 18 7 Weeks
Al Shahnaniya 6 5 Weeks
Source: Author
In this fast-moving business world, a minute is worth a million dollars for Small and Medium
businesses and all expect their new applications / New Requests for business related
activities to be processed faster than anything in order to secure the company’s business
interest related to their profits and revenues. Unfortunately, what our valued Doha Bank
Small and Medium clients are facing is totally negative to what everyone is thinking. This is
the huge delay and complicated handling processes of their new and day to day business
requirement requests. As a result, bank faces the following consequences:
i. Losing of its existing customers to competitors
ii. Inter related profit/ incomes/fee via current and future business proposals
iii. Drop out of new customer proposals /projects
iv. Loss of cross selling income /profit/ fee
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Table 2.6 statistics will provide a picture of existing SME loans and customers moved to its
competitors simply due to long delay in processing its credit project proposals for the last 03
financial years.
Table: 2.6 Existing Loans and Customers
Description 2015 2016 2017
Number of Customers Moved
out
16 23 37
Loan Amount Transferred to
Other Banks
Qrs.75 MN Qrs. 138MN Qrs. 152MN
Source: SME reporting Doha Bank 2017
Table 2.7 statistics will provide a picture of dropping out of new customers and their project
proposal amounts simply due to long delay in approvals for the last 03 financial years.
Table: 2.7 New Projects and Customers
Description 2015 2016 2017
Number of New Customers
dropped
20 28 15
Project Amounts Qrs.100 MN Qrs. 160MN Qrs.90MN
Source: SME reporting Doha Bank 2017
In addition to the loss of existing customers, it is worth to note the incomes, fees, profit
generated by the existing facilities and the anticipated income, fees, profit by the new clients
and their proposals. Table 2.8 will clearly elaborate the income, fees and revenue losses.
Table: 2.8 Income Statements
Description 2015 2016 2017
Loss of Management Fees Qrs.187,500 Qrs.345,000 Qrs,380,000
Loss Interest Income Qrs.675,000 Qrs. 1,242,000 Qrs.1,360,000
Loss of Others related income
(Cross selling etc.)
QRs,50,000 Qrs,70,000 Qrs,90,000
Source: Author
20

Similar to loose existing customers and facilities causing a considerable revenue generation
and commission plus fee-based income loss. Losing New potential customer’s project
proposal revenue generation and fee, interest income are also being considered in deciding
the fate of practicing a weaker SME operational model for a long year.
Customer requests and processing timeframes are clearly shown in Table 2.9 in order to
support or justify the identified problem of weak SME operational processes or SME
operational model at Doha Bank.
Table 2.9: Application Processing
Request Type Approving Time Standard
New Credit Proposal 04-06 Weeks 02-04 Weeks
Facility Renewals 03-04 Weeks 01-02 Weeks
Day to Day customer request
processing
01 – 03 Days 01 day
Expired Facility request
processing
02-05 Days None (No expired Facilities)
Source: Author
Moreover, customer complaints recorded via Bank call center, Branch distribution channels,
and E-channels, social media will add more justification to the Identified Key Problem of
Weak SME operational processes or Operational Model has led the bank for its downfall in
the Small and Medium Banking Industry.
Table .2.10 and Figure 2.1 provides the customer complaint data related to SME unit.
Table 2.10: Number of Complaints Figure 2.1: SME Complaints Details
21

Source: Author Source: Author
Table 2.12: SME complaints and Impacts
SME Complaints Impact towards Bank
Delaying New Proposals Loss of new potential business and bank negative image
Delay in Security
Documentations
Customer disappointment and bank negative image
Delay in Daily Request
approvals
Customer disappointment and losing customer to
competitors. Customer interest accumulation may be
refunded by bank.
Delay in Facility Disbursements Losing customer to competitors, write off of bank
charges incurred due to delays.
Delay in Facility Renewals Losing of interest income and commissions
Delay in Settlement of Facilities Losing of interest income and commissions
Source: Author
22
Month/Year
Number of
Complaints
against SME
Unit
Jun-17 10
Jul-18 14
Aug-18 19
Sep-18 13
Oct-18 11
Nov-18 15
Dec-18 10
Jan-18 13
Feb-18 12
Mar-18 14
Apr-18 11
May-18 11
Jun-18 11

2.6 Summary
Throughout this chapter two, the author has analyzed company’s identified issue in detail by
using SWOT and PESTEL analysis where by SWOT analysis, it was revealed that company
has great opportunities over threats mainly due to Qatar decision to produce its products and
services by its own and the forth coming FIFA world cup matches preparations. As far as
PESTEL is concerned, it gives a green light via country’s rules and regulations for a SME
start-up. The identified and analyzed issue of company is as chapter describes static growth
of SME Lending mainly due to High handling cost, Weakness in Operational model and Poor
Rating System.
23

CHAPTER 3
THEORETICAL FRAMEWORK FOR DIAGNOSIS
3.1 Introduction
This chapter discusses the theoretical background of operational model problems of small
and medium scale within an organization and critically reviews through literature analysis
on policy procedure, employee productivity, processing time and the impact on stakeholders.
Operational process of banking institution plays a vital role in deriving bank’s ability to
process loan in the shortest time period. It plays a crucial role in managing effectiveness in
banking services because it derives the bank’s ability to enable fund to its clients. Every bank
has specific process of loan which comprises of analysis of prospective loan client with
evaluating individual’s sincerity and character which derives one's ability to repay. This
reduces the risks of credit management (Wagner, 2010). However, to manage effectiveness
in operational system of institution, it is necessary for the business to ensure customer’s
record before granting loans. A designed study framework and identified suitable techniques
to resolve the problems are briefed in this chapter. Finally, this chapter concludes with a
summary.
3.2 Theoretical background to the problem
According to the view of Gutiérrez-Nieto, Serrano-Cinca and Camón-Cala, (2016), in a
competitive marketplace it is required for companies to provide quality products and services
in order to acquire higher value of market share. To accomplish this, firm should actively
measure or improve their operation’s efficiency in their entire value chain. Efficiency is
known as core about producing more and better products as well as services with the use of
same fewer resources. One of the main tasks of banks is to use member’s accumulated
savings in respect to grant loans to same customers. The loan is provided from members
collected savings or outside funds which are sources by banks. According to the views of
Sousa, Gama and Brandão, (2016) there are two types of loans which are common in banking
and finance sectors that are for short and long term. Short term loan is the one which can be
replaceable within the year and they are generally for school fees etc. However; these loans
are not used for enhancing the overall earning capacity.
24

Nikolova, Rodionov and Mottaeva, (2016) stated that in respect to overcome unavoidable
loss of scale and cost issues, banks should plan innovative operating models. Further,
imaginative method is needed to deliberate such as cut costs and control on a broken value
chain.
Issues related to loan approval: At present there are number of small and medium scale
businesses which accepts new and advanced applications and suggestions for making their
business activities more smooth and fast. It also helps them to secure desired postion among
their competitive organisations in terms of sales and profits. There are many banks which are
experiencing great difficulties and challenges as compared to other banks who have adopted
new technology for making improvement in their operational services. There is huge time
delay and barriers in managing day to day business and operational requirements. It results
in loss of their existing customers due to service dissatisfaction, declination in interrelated
profit and income fee as well as drop of new customers and lose of cross selling income.
DeYoung, Gron and Winton, (2015) stated that weak operational model leads to the downfall
of small medium banking. For SME banking to accomplish success, it is important that they
avoid issues due to which customer’s satisfaction is getting affected.
Peters and Panayi, (2016) argued that main obstacles for these institutes is arehigh handling
cost, weak SME operational process and poor credit facilities, etc. All these issues are
interrelated directly and indirectly with the losses, increasing cost and also put negative
image of the bank in market. Therefore, all these can be categorised in the process, cost and
technology related issues. If there is weaker SME’s operational process, then it can become
main reason for many of the issues which are faced by bank divisions. According to the
opinion of Mocetti, Pagnini and Sette, (2017) weaker operational process of the bank can
affect standard turnaround time while serving a customer.
There are few key elements which lead to directly impact the organisational efficiency level
such as use of technology, design of process, corporate culture availability of timely and
accurate process data, etc. Author said that to have timely and accurate process data is
considered as one of the pillars of an efficient organisation. If it is challenging expressing it
in facts and figures then it will never allow getting into detail for managing and controlling
it. . Thus, process data helps in permitting for active monitoring and making appropriate
decision. Improving operational efficiency helps in having a strong culture of responsibility
25

and it also assists in increasing it. In order to find out operational opportunities, organisation
needs to critically assess their performance at the same time disregarding threat of negative
implications. Cost efficiency is known as the key for emerging some new operating models.
Dang, Gorton and Ordonez, (2017) stated that SM banks are required to be flexible enough in
respect to function successfully in this new environment. Hence, banks should componentize
operating models which are reinforced by flexible and configurable architecture.
Obtaining credit approval from lenders, according to the view of Van der Vliet, Reindorp and
Fransoo, (2015) to obtain loan approval is not an easy process as there are wide range of
stages which are involved in it. Some of the important stages and types of approvals are
known as indicative, pre-approval or in principal, conditional permission, etc. Furthermore,
there are a few types of mistakes due to which company has to make delay in loan approval
process. Due to lots of loan applications, small medium banks forget to review basic personal
and contact information, etc. Madrian, Hershfield and Rick, (2017) stated that along with
this, it is important for customers to provide personal details whether it is mentioned in the
process or not. Each and every document needs to be provided on time as delay in documents
can affect the entire loan approval process.
As per the opinion of Citron and Pasquale, (014) building up another operational model won't
in itself position a bank to prevail in the new market. The working model is just piece of the
test. Regardless of how vigorous or modern the working model might be, if the usage
procedure does not have a powerful administration system, driven by solid, focal outline
specialist, the operational model will never completely accomplish what it was intended for.
The genuine test is in how successfully the working model is actualized.
Like this, Rostamkalaei and Freel, (2016) state that executing another operational model may
mean presenting another innovation foundation, moving towards new procedures or changing
the operational structure of business – real modification that should be strapped through bank
adequately without trading off the goals of new model.
According to the view of Metawa, Hassan and Elhoseny, (2017) there is no single method
that can help in successfully transforming the bank’s operational model. The approach of
transformation depends on the goal and it can easily improve customer experience. Further, it
helps in improving the customer experience rationalise process and also reduces cost in the
26

back-office operations. In banks, different types of approaches are adopted and company
suggesting a best practice for transforming the bank’s operational model.
At last, numerous banks are troubled without-of-date IT frameworks. As rivalry warms up to
win back clients and increment interior proficiency, frameworks will require overhauling no
matter how you look at it. Numerous banks are evaluating centre framework moves up to
convey greater adaptability and configurability to their item improvement and estimating
capacities. Innovation is additionally entangled by the quick rate of progress and presentation
of new channels and advances. For example: portable keeping money and online networking.
The sheer pace of progress recommends that IT will require critical re-building to help entire
re-working of conventional managing an account working model.
3.2.1 Policy and Procedures
According to the view of Metawa, Hassan and Elhoseny, (2017) it is analyzed that time delay
in small and medium credit application requests is due to the complexity in nature of policies
and procedures. It is identified that in entire credit application process, there are various
formalities which are required to be fulfilled as per provided in policies. Due to this reason,
Doha bank is not able to carry approved loan on time. This will lead to increase the
dissatisfaction level and complaints from customers. It is the role and responsibility of board
and management to maintain the quality of services as well as the guidelines for procedures
and policies. Risk is inevitable and bank can reduce failures with the development of and
adherence to effective loan policies and procedure. Policies and procedures of small and
medium sized banks are complex for customers as the banks are strict with policies of
agreement which causes difficulty for the customers to understand. Moreover, procedure is
time consuming because small and medium sized firms take time to process the loan request.
The bank first secures guarantees. Lengthy policies and procedures to mitigate credit risk
causes time delay and processing loan request. However, operational process of banking
institution plays a vital role in deriving bank’s ability to process loan in the shortest time
period. Effectiveness of operational process is regulated with policies and procedures where
the focus of bank is on deriving client’s ability to payback. Every bank has specific process
of mortgaging loan which comprise, analysis of prospective loan client, evaluating
individual’s sincerity and character which derives one's ability to repay. This reduces the
27

risks of credit management (Wagner, 2010). However, to manage effectiveness in policies
and procedure, small and medium size bank ensures customer record before granting loans.
Moreover, loan granting procedure of bank aims at evaluating client’s financial condition and
compliance with credit agreement on the basis of terms and condition.
Apparently, policies and procedures of small sized banks are designed to make proper check
over lending requests which help in managing effectiveness in the banking services but it is
time consuming. On the other hand, compliance with policies and procedures is mandatory
requirement for the employees of bank as well as for customers. This approach leads to the
delays in managing loan request.
3.2.2 Employee Productivity
DeYoung, Gron and Winton, (2015) stated that employees are important part of the bank. As
loan approval moves upwards for getting acceptance from employees, it is important for bank
to focus on improving employee’s productivity in order to reduce the chances of delay in
lending process. Duchin and Sosyura, (2014) explained that there are different motivational
tools which can be used by firm in respect to increase employee’s productivity. It is
considered as a strong cause of time delay in small and medium credit application’s request
process. Along with this, it is essential for banks to evaluate the performance of employees
and provide them training facilities accordingly. It will help banks in making improvement in
working culture and they can also modify their operational model for providing better
performance.
Worker’s productivity is referred to individual’s working efficiency in terms of final output
(Qian, Strahan and Yang, 2015). In accordance with analysis, it can be said that employee’s
productivity is directly proportional to operational efficiency of banking institution. In
accordance with this, it can be said that increasing work pressure on employees leads to mis-
management and causes delay in management of loan request. Further, it is necessary if the
small medium sized banks reduce paper work which will help in maintaining categorised
record of client’s request and interest payments. Digitalisation of work management is the
source which can help the firm in improving employee’s productivity with timely
management of loan request.
28

3.2.3 Time Management
According to the view of Lee, Sameen and Cowling, (2015) there are many SME banks that
are using old method for approval of loan due to which lots of time is consumed by these
institutes. However, Madrian, Hershfield and Rick, (2017) argued that the time consumed for
approval of a personal loan depend on authenticity of information which is provided by
customers. It is important for small medium banks to adopt new technologies in order to
reduce the processing time of loan approval. There is a wide range of services which are
offered to customers in respect. It is important for company to focus in improving their
operational process which will help in reducing the chances of delay in process. Along with
this, it is important to provide whole details to customers at the time when they apply for
credit so that without any barrier, entire process can be completed. Vliet, Reindorp and
Fransoo, (2015) stated that turnaround time is the duration for the application of a loan by a
customer till final disbursal of loan amount. There are most of the customers who want to
connect dots between online and offline option in order to deliver suitable and reliable
services. Online loan process approval is one of the effective techniques which can be used
by banks so that they can easily make changes in their way of working.
It is the key concern of small banking institution because loan request is processed only after
customer check and assessment if loan grant. In this, the aim of bank is to evaluate client’s
overall information for processing loan. Moreover, the bank takes time in compliance with
process and procedure which leads to delay in processing. Delay in process of loan request
increases the risk of losing corporate’s reputation of bank which is directly concerned with
functioning of banking institution. Therefore, it is essential for the banks to determine
specific time for processing loan request which will assist institutions in maintaining
effectiveness in lending services (DeYoung, Gron and Winton, 2015). However, it can be
said that processing time management can be done by small bank by increasing operational
efficiency which will aid the organisation in improving process for originating and servicing
loans request, reduction in cycle time and eliminating paper work.
3.3 Framework of the study
Main focus is to create a competent SME lending operating model for Doha Bank to achieve
a competitive advantage in revenue maximization. The study framework of this project
29

consists of 03 components such as policy and procedures, employee productivity and time
management. Policy and procedures will analyse grey areas which block the process flow
and employee’s productivity to identify the efficiencies of staff members and contribution,
whereas the Time management is used to assess the processing duration of each unit or steps.
Figure 3.1 shows the Time Framework.
Figure 3.1: Study Framework
Source: Author
3.4 Description of the Techniques
Two types of techniques were selected to resolve the problems and issues. Those techniques
are as follows:
i. Cause and Effect analysis (Fish borne or Ishikawa Diagram).
ii. Time and Motion Study
3.4.1. Cause and Effect analysis
Cause and Effect analysis will be used as a technique to find out the reasons behind problem.
Fishbone diagram is an analysis tool invented by Dr Kaoru Ishikawa, a Japanese quality
control statistician. It is also referred as a Cause- and- Effect Diagram. With the help of
visual representation of fish-borne diagram, banking institution will be able to determine
problems which will make the lending process lengthy (Mocetti, Pagnini and Sette, 2017).
30

3.4.2. Time and motion study
According to the view of Mocetti, Pagnini and Sette, (2017) a time in motion study is a firm
productivity strategy joining the Time Study work of Frederick Winslow Taylor with the
Motion Study work of Frank and Lillian Gilbreth. After its first presentation, time study is
created towards building up standard circumstances. While, movement thinks about
advanced into a strategy for enhancing work strategies. The two procedures ended up
coordinated and refined into a broadly acknowledged technique pertinent to the change and
updating of work frameworks. This coordinated way to deal with work framework change is
known as strategies engineering and it is connected today to modern and also benefit
associations including banks, schools and healing centres. Similar to this, Peters and Panayi,
(2016) state that time motion study benefits the banking sector.
3.5 Summary
The chapter clearly and deeply went through all related literature reviews and theoretical
frameworks and provided a good understanding of the identified problem. In addition, it
explains techniques selected to resolve identified issues and further, elaborated the way
forward in resolving using these chosen techniques.
31

CHAPTER 4
THE PROJECT
4.1 Introduction
Chapter 4 focuses on project activities in detail and gives a clear picture of the
undertaking. Selecting right objectives will be the key to success in any kind of project. One
main and three sub objectives are set to achieve and through these defined objectives, the
project team expects to address Doha bank turnaround delay in small and medium lending
model. In addition, 04 components are also identified including the current situation analysis
and work process break down is discussed in detail. The components are linked with
theoretical framework. Resource allocation and cost benefits also treated as crucial aspect of
this project and discussed. Project plan is designed with reachable deadlines. Finally, chapter
concludes with project output and outcomes along with the summary.
4.2 Project Objectives
The main weakness identified through SWOT analysis in previous chapter (Chapter 2) was
Turnaround time delays in processing Small and Medium loans/ other customer requests,
even though there are other issues as well that made the Doha Bank’s small and medium
lending to fall and bring it to stagnated level. This turnaround time delays were due to three
inter related weaknesses of the bank such as policy and procedure mismatches, low employee
productivity and poor time management. Therefore, few sub objectives are also set to resolve
these weaknesses and for bridging the gap.
4.2.1 The Prime Objective
The main weakness identified through SWOT analysis in previous chapter (Chapter 2) was
Turnaround time delays in processing Small and Medium loans/ other customer requests,
even though there are other issues as well made the Doha Bank’s small and medium lending
to fall down and bring it to stagnated level. This turnaround time delays were due to three
inter related weaknesses of the Bank such as policy and procedure mismatches, low
employee productivity and poor time management. Therefore, few sub objectives also set to
resolve these weaknesses and bridging the gap. “To reduce the turnaround time of small and
medium lending processes of bank current manual process is replaced with new program
lending model (System Based Model) by December 2018” It was identified by our project
32

team that their performance gap in three areas which caused delay in turnaround time
lending processes model. Those three performance gap areas are policy and procedure’s
weaknesses, employee’s lower productivity and poor time management issues. Therefore,
following sub objectives were set by the project in order to cover those issues.
i. Revise bank’s internal rules and regulations of small and medium lending in order to
match with the current market requirement by September 2018.
ii. Improve the level of staff efficiency of small and medium credit department
employees up to industry standard by October 2018.
iii. Minimize customer delays and customer complaints by December 2018.
4.3 The Project; Project Components
The project is with four components including the current situation analysis. Activity plan
under each component in this project is clearly drawn. These four components are in line
with the study framework of this project.
Table 4.1: Project Components and Techniques
Project Components Techniques
Current situation analysis Cause & effect diagram, Pareto analysis, Kipling’s
method, Work study, Value stream mapping and SWOT
Policy & Procedures 5 Why and Process mapping
Employee Productivity Training & Development, 360 Feedback
Time Management Time and motion study
Source: Author
4.3.1 Component 1: Current situation analysis
A detailed current situation analysis was performed and data is collected from several
reliable sources so that it can be validated. During this project period, project team would
hold meetings with bank’s small and medium section heads, senior executives, relationship
managers, sales units, credit analysts and branch managers in relation with identified bank
problem to be addressed. In addition, interviews would be done with experienced banking
professionals in the higher management in order to understand environment at banking point
33

of view. Further, customer complaints and client delayed reports would be collected to verify
the data.
Along with the interviews and meetings, direct observations would be done to ascertain
actual situation of problem. It is essential for project team to compare verbal information
with actual processes to validate. It would make way for project team to cross examine
contradictory points and receive direct responses. Through the information gathered, team
members will draw process gap’s which would enable undertakings to re confirm the defined
problem.
Through a Pareto analysis, loan requests which are delayed from long time are identified
and the worse customer complaint among the selected samples is also analysed. SWOT
analysis done before helped to identify the current situations of bank’s small and medium
lending issues. This analysis would help to understand the issue in detail and to find out
possible strategies to be adopted to resolve or rectify.
The project team would move into finding root causes for the problem once required data
collected for understanding current situation analysis. For main problem and its sub issues,
cause and effects analysis will be performed. The project scope would be on weaknesses in
policy and procedures, low productivity of credit staff and poor time management. Another
useful factor in this project to understand root causes will be literature review done.
Following analysis would also be done to identify the current situation. As elaborated in table
4.2, these are work study and value stream mapping and Kipling’s method.
Table 4.2: Current situation analysis tools
Component Tools
Current situation analysis Cause and effect analysis
Pareto analysis
Kipling’s Method
Work study
Source: Author
4.3.1.1 Cause and effects analysis
Figure 4.1: Ishikawa diagram – Cause and Effects
34

Lengthy Not Updated
Complicated Complex
Unwanted steps Not matching
Out dated Fundamental errors
Not utilized Lack of s
Not user-friendly Knowledge
Low productivity
Not updated Complaints
Lack data No commitments
Source: Author
Figure 4.1 is clearly showing the issues of current operational lending model. Diagram has
detailed different root causes which result in the long delays. Diagram helps to identify and
analyze vulnerabilities, value chain effects and to provide suggestions to reassess the
processes.
4.3.1.2 Kipling’s Method
The following outcomes were recorded through Kipling method analysis. Figure 4.3
describes the outcomes.
Table 4.3: Kipling’s Method
Kipling’s Method
What is the problem? Long delay in loan process
When does it
happening?
All the time of processing loan request.
35

Where is it happening? In loan department of Doha Bank
Why is it happening? Lengthy processes, strict policies and procedures of bank, time
consuming activities like those of documentation as well as
employees are not productive.
Who do you need to get involved?Entire upstream from the
inbound officers like SCM, sales and finance as well as loan
and IT department
How can you overcome
this problem?
By reinventing the operational model and system-based
processes company can reduce their work and operations.
Source: Author
4.3.2 Project component 2: Policy and Procedures
Bank lending policies play a major role in loaning portfolio’s growth and turnaround time of
loan processes. Doha Bank currently uses policies and procedures which are the major
concern for their lending setbacks. Starting from SME’s general guidelines, equity
substitution, eligibility sectors, know your customer approach, liability and asset growth,
guideline for credit evaluation, analysis of financials, limits proposed, pricing, collateral,
insurance, documentations, monitoring and recalling facilities are seeming to be outdated. In
addition, continued and rapid changes in the SME market has pushed Doha bank in to a
corner. Even though bank attracts more potential customers through wide range of SME
products, it could not grab them and retain those latent consumers. The outdated policies not
only restrict the new comers, it also resulted for losing existing customers as well from its
complicated policies and lengthy procedures. Moreover, these policies restrict the pricing to
certain. By the time SME officials obtain an exceptional pricing to meet the market condition
the Client is develops dissatisfaction and had already planned to choose other banks This is
due to complicated approval matrix. 5 Why technique is used in figure 4.2 to identify the
issues related to policies and explained.
36

Policies are not matching the current SME Lending requirement
These are old policies
No periodical review or update not done
SME polices consist more rules and regulation
Policies written mostly on secured base lending
Figure 4.2: 5 Why’s
Source: Author
The current workflow process in Doha bank’s SME unit is a lengthy one and a loan proposal
must go through nearly 10 stages to get it formally approved. Once credit proposal is
approved, documentation part starts and thereafter, disbursement activity to end whole cycle
of a small and medium loan received by customer. In general, it takes 4 to 6 weeks
approximately. This is far behind when compared to the competing banks. These process
delays are the main contributors for problems such as customer delays, complaints of clients
and losing the valuable target group.
Table 4.5: Loan process - workflow Chart
37

Source: Author
Figure 4.5 Loan process workflow chart clearly shows the lengthy process including several
stages. Project team would use application of lean practices to reduce the time consumed and
eliminate extra stages which are not adding any value for the process.
4.3.2.1 Solution and Development: Revise of Policy & Procedures
It is clear through the analysis that Doha Bank’s SME policy and procedures are outdated
and not matching with current market conditions. Therefore, following sections of bank’s
SME policies and procedure would be revised in order to match with the market conditions
with making sure that Central Banks and Internal compliance requirements are not deviated.
Table 4.6 shows the policy and procedure amendment requirements.
Table 4.6: Policy and Procedure Amendments
Sequence Policy & Procedure Amendment Required
/Amendment Not Required
01 General Lending Guide Lines Required
02 Eligible Sectors Required
03Liability/Asset Growth Required
04 Credit Evaluation Guide Line Required
05 Financial Analysis Process Required
06 Pricing Policy Required
07 Collateral Requirement Required
08 Documentation Requirement Required
09 Insurance Required
10 Monitoring Steps /Rules Required
Source: Author
The above proposed amendments would bring SME lending processes more convenient and
practical to do business in current banking market. Customer delays and their complaints
will be minimized. Most importantly, Doha Bank’s Small and Medium Lending portfolio
38

will show an upward trend. As far as SME loan process model is concern, currently all the
activities are under manual process. As main objective of this project is to introduce Program
Lending Model to the bank (System Based Lending Model), almost all the loan processing
will be done through system in completion of this project. With introduction of Program
Lending Model (System Based Lending Model), the following developments can be achieved
and benefited. Main purpose of this program lending will be one of the bank’s product
development strategies which will enable bank to handle large volumes with low cost
operational methodology that will cater to the new and existing customers who fall within
SME category. The sustainable competitive advantages which are identified are as follow:
1. Prospective corporate customers: These companies may be small in terms of their
assets, headcounts and turnover at present. However, in the long run, they can grow to
bank’s potential corporate clients.
2. Shortening the approval process: By adopting proposed methodology for SME-
Program Lending, credit approval process can be redefined to shorter turnaround
time.
3. Highly profitable segment: The high pricing will give bank an opportunity to
generate income in the form of greater interest rate and commission charge on SME
products.
Widen SME base: Qatar’s economy has been experiencing an unprecedented growth
and small industries are emerging at a faster rate and provide bank potential to widen the
base. This Program Lending Software adoption will provide the bank more benefits which
were not available in the manual processes.
a. All approval process via system
b. Provide the financial statement of customers
c. Priniting of security documentations
d. It will also cover the Risk rating /Credit scoring model
e. Ability to electronically forward Credit application form together with internal risk
rating work sheet from originator up to approval level
f. Under monitoring mechanism will help bank to proactively manage default risk
g. Provide necessary date through various MIS reports
h. Ensure annual review of facilities
39

i. Client contacts for follow up
j. Perform the watch list activities and transfer non-performing to recoveries
k. Recovery and follow-up will be done via SMS and Auto generated letters.
Recommended SME Program Lending system is shown in Figure 4.8
Table 4.8: Program Lending
MR (research) DSU (sales) RM(managers)
Source: Credit department Doha bank
4.3.3 Project component 3: Employee productivity in analysing small and medium output,
low productivity issue with most of the employees was found. Low productivity is leading to
continuous process delay which is creating customer disappointments and increase the
customer complaints. Main reasons for the lower productivity issue are that employees are
40

lacking the big picture, poor credit knowledge, ineffective supervision, lack of delegation,
inconsistencies, unproductive communication, inappropriate behaviour, absence
acknowledgement, etc. Moreover, due to nationalization vision, nearly 15% of excess
employees are added to the workforce by HR without any kind of value addition to
department. Through a 360 degree feedback method, service productivity analysis , quality
maintainence of the task completed and time management assurance methods are used to
identify the exact reasons behind the low employee productivity.
4.3.3.1 Solution and Development: Employee Productivity
In view of employee productivity solutions and development the project team will get a 360-
degree feedback from all SME department’s employees to know the exact issues and
concerns. The low productivity date would give incorrect data due to 15 % of staff members
are forced inclusion to the department from HR. Therefore, initial talks would be done with
HR to move those excess staffing to the other administrational department which are not
profit canters. Thereafter, employee’s productivity enhancement activities would be done in a
systematic manner with a defined time frame. In this, training and development will play a
key role. Therefore, bank’s training and development unit and HR will be included in the
project team. Team would recommend necessary amendments to bank’s annual appraisal
system into a performance-based assessment with credit scoring. Project team will along
with training and development will carry out extensive grooming session of enhancing
productivity of SME staffing.
4.3.4 Project component 4 : Time Management
Missing time management practices is the issue at bank’s small and medium sized activities.
In view of establishing a SME unit well before competitors, sme management of department
has rushed into create a policy and process flows. As a result, all the mandatory requirements
to be included in a process flow got excluded by deciding that it would be added at a later
stage. Unfortunaltely upto today, the SME process flows are runing without defined
Turnaround Time. No turnaround time process has created unacceptable customer delays and
led to high number of customer complaints. Figure 4.8 shows the Turnaround time against
each loan process stage.
41

Table 4.8: Turnaround Time vs. Loan Process stages
Stages Loan Process workflow Turnaround Time
One Sales unit/Branch staff Not Defined
Two Relationship Manager for initial discussion with
client
N/A
Three Credit Analyst Not Defined
Four Relationship Manager for recommendations Not Defined
Five Team Leader for 1st approval Not Defined
Six Head of SME for 2nd approval Not Defined
Seven Credit Risk 1 -2 days
Eight Head of Credit Risk for approval 1 Day
Nine CEO 1 Day
Ten Credit Committee – If required 2 Day
Source: Author
Through a time and motion study method, the efficiencies would be identified and unwanted
no value steps could be eliminated.
Table 4.9: Time and motion study Loan process workflow
Stage
s
Loan Process workflow Average
Time
Taken
High
/low
Value
One Sales unit/Branch staff – Receiving Request &
submission to Head Office
07 Days Low
Two Relationship Manager for initial discussion with
client
07 Days Low
Three Credit Analyst 10 Days Low
Four Relationship Manager for recommendations 07 Days Low
Five Team Leader for 1st approval 14 Days High
Six Head of SME for 2nd approval 14 Days High
Seven Credit Risk 07 Days High
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Eight Head of Credit Risk for approval 07 Days High
Nine CEO 1 Day High
Ten Credit Committee – If required 2 Day High
Source: Author
The figure 4.9 shows the Time & Motion study work is done. It identifies the low value
activities which have taken higher number of days. Inefficiency would be looked for in order
to eliminate them.
4.3.4.1 Solution and Developments: Time Management Introduction of Programmed Lending
(System Based Lending Model) will provide solution to the time management issues as well.
Main cause was the manual process which created Turnaround time delays. Therefore, the
recommendation will overcome all turnaround related obstacles and provide a longstanding
solution to the problems identified via this project.
4.4 Resource Allocation
The project teams will include staff members from bank and no outside recruitment or
consultancy will be required. Whereas, the project requirement is to in-build a Program
lending model from the existing bank’s core banking system, the need of experienced staff
member is more essential rather than consultants. This will be major advantages to the bank
in terms of cost concerns. The project team structure is given in figure 4.2
Figure 4.2: Project Team Structure
Source: Author
The project responsibilities were designed by the project owner in a systematic manner. As it
is more internal process, reassessment and implementation of suitable design for the bank
team was selected with adequate industry experience and knowledge.
43

Project owner takes care of most of the surveys and overlooks total project. SME relationship
team were responsible for all types of assessment and testing of operational models along
with IT team. Here, in the project, IT team is responsible for all system inputs and IT related
advice.
HR/Training team also included for training purposes of SME relationship teams. Few
voluntary project assistants were added to help owner in the project activities. Table 4.10 will
clearly show the responsibilities of project team members.
Table 4.10: Resource allocation of project
Project Component Team Members Roles and Responsibilities
Current Situation Analysis Project Owner
SME Relationship Team
IT Team
Project Assistants
Information gathering,
submitting monitoring,
closing the project.
Analysing all reports/models
and recommending
IT developments
All project related works
directed by Project Owner
Policy and Procedures SME team Review and revising the
existing policy and
procedures
Employee Productivity HR and Training &
Development Team
Conducting training and
workshop on Employee
engagements
Time Management IT Team Development of Program
Lending Model
Source: Author
4.5 Cost Estimates and Cost Benefits
The table 4.11 will elaborate the cost items and its estimates in detail.
Table: 4.11 Cost Estimates
Task Name Cost (Qatari Riyals )
Software Adoption (Inbuild System ) 00
Project Team Payments ( Internal Staff –Fixed Allowance for full
project) 100,000
Trainung and Development( Internal Trainers ) 20,000
Missalaneous Payments ( Refreshments /Staionary etc) 5,000
44

Total Cost 125,000
Source: Author
Table 4.12 will explain cost benefits from this project to the bank. Here, in this project, the
cost benefit will be assessed not in direct terms of money value rather it provides indirect
cost benefit and increases profits for bank.
Table 4.12: Cost Benefits
Before Start of
Project
Qatari
Riyals
After Completion of
Project
Qatari
Riyals
Cost Benefits
per annum
(Qatari Riyals)
Software
Adoption
through outside
vendor (If
requested)
1.5million Software adoption
from internal staff
100 k 1.4 million
Excess 15%
Staff salaries
paid by SME
department
1.2mio per
annum
Relocation of Excess
staff salary savings
1.2mio 1.2mio
Total Benefit 2.6 million
Source: Author
4.6 Project output and outcomes
Table 4.13 will provide the details of project outputs and outcomes.
Table 4.13 Project output /outcomes
ACTIVITY COMPONENT OUTPUT OUTCOME
1
Situation evaluation
and validation of
information
Current situaton analyis Outlined basis for project
plan and suitable
measures for solutions
2 Policy & Procedures Updated Polciy and
proceedures and improved
processes. Reduced check
list requiemts from 10 to 5.
Simplified policies, less
documentation and paper
work is expected to
generate new business
worth of Qrs.50mio to
45

100mio in months to
come.
3
Employee Productivity Improved employee
productivity and 20%
reduction in department
staff cost.
Well trained and efficient
SME process unit staff.
Productivty can be
quantified through
performance appraisals.
Expected further cost
reduction of more 5%
and increased processing
speed by 25%. Expected
to save further staff cost
by qrs.0.5million by the
next year.
4
Time Management Minimise manual work
and handling processes.
Reduced process timing.
System automation saved
additional staff cost of
Qrs.1.2mio per annum.
Efficient and speedy
processing model. High
number of aplications
processed. Expected to
transform into e-
channeled based
processing model and
minimised processing
time to one day and SME
porfolio to be increased
to Qrs.2.0billion from
Qrs.1.0billion.
Source: Author
46

4.7 Project plan
Table 4.14: Project Time Planners
MonthS
ept-1 Oct-18 Nov-18
D
e
c
-
1
8
Week 4 1 2 3 4 1 2 3 4 1 2 3 4
Project Proposal
Current Situation
Analysis
Shifting Excess staff
Policy & Procedure
revise
SME Team assessment
& recommendations
IT developments
HR/Training
Software adoption
Project Completion
Source: Author
4.8 SummaryChapter 4 discussed the project details and way in which owner will reach at
targeted objectives within given timeframe. Project components are discussed along with
techniques, resource allocations, outputs and outcomes. More suitably, time plan of total
project is given to show how owner will successfully complete said project.
47

CHAPTER 5
DISCUSSION OF IDENTIFIED COMPONENTS
5.1 Introduction
The chapter 5 is focused on outlining discussions on project findings and solution of
identified problem of Doha bank’s small with the help of medium lending model. The
discussion will be mostly based on the recommended solution and literature. This chapter
will present the recommendations to support its given solutions. Through the
recommendations the author will justify solution given to the identified bank’s problem.
Moreover, through this chapter author will be able to determine positive response from the
side of company which will assist in making recommendations.
5.2 Discussion
This underlined project has dealt with the understanding of all possible efforts that
could be made with respect to reduce delays in turnover time of SME (ABM explains long
turnaround time for loans disbursement for SMEs, 2018). This included all issues with
operational model of SME bank that is operated in Qatar. It is important to consider a critical
role of SME in developing and advancing the countries, at a global level. There are numerous
SME which operates to maintain innovation and sustainable development.. The penetration
rate of SME in financial and banking industry is greatly witnessed with relay on innovation
and digital technology. Financial institutions and banks are emerging firm in Qatar market.
As per the current situation, the country is having low financing penetration in SME
segment. Therefore, this project was focused on identifying reasons behind delays in
turnaround time of SME lending process. Delays in the Turnaround Time of Small and
Medium Loan request processing in the bank has been found to be a major aspect of concern.
As per the study, it has been determining that 1 to 1.5 months are taken by for approving a
Loan request. So, there is a need to access the process of loan approval to smoothen the
process flow and introduce an automated loan processing system that is expected to reduce
the delay in time by 1-2 days.
48

5.2.1 Current Situation Analysis
As per the current scenario SMEs are playing vital role in terms of sustainable
development, innovation and advancement to increase the sense of globalisation, and help
them compete at a stronger level. Banking and financial sector are also developing and
growing in market of Qatar where there are a greater number of SME’s operating in the
market. Moreover, it has been analysed that Qatar owns low penetration of financial
organisations while there is also very much interference of other states to develop the SMEs
within the nation (Duchin and Sosyura, 2014). According to the current situation of SMEs in
country, it has been evaluated that disruption in technology is hindering customers which has
increased number of complaints. In accordance with this, it has been derived that the major
reason behind increasing client complaint is delay in processing of lending request. Doha
bank is one of the fastest growing banking firm of Qatar. that can be clearly depict the role of
SMEs as a huge contributor in the development of economy. In this respect, it has been
analysed that Doha bank during the year 2008 launched “Tatweer” that was in relationship
with SME.
One of the major issues in this respect is decrease in speed at which banking
institutions were operating and therefore still not able to achieve excellence in its customer
service. Moreover, banking institution like Doha bank is facing Turnaround Time (TAT) for
every activity that is performed in firm. Time duration for resolving issue of customer,
printing of documents, manual management of paperwork, approval of loan amount and
sanction of loan are the activities which consumes time and leads to delay in money lending
process of bank (Gutiérrez-Nieto, Serrano-Cinca and Camón-Cala, 2016). Disruption in
technologies resulted in increase in customer complaint which impacted processing and
profits of banking institution.
5.2.2 Policy & Procedures
Apart from this, there is paper work and documentation that need to be presented before
resolving any issues related with customers. It has been analysed that loan request of
consumer is delayed due to number of banking policies and procedures. All credit application
needs to undergo many formalities and approval from number of senior authorities which
takes time in approval which results in increasing consumer complaints. So, regarding this,
senior or higher authority of bank should make their own efforts and maintain the same at an
49

adequate level of the organisation (Lee, Sameen and Cowling, 2015). Thus, there are many
situations when customers complain for delays in addressing their issues and problems which
generally occurs due to the undertaken policies and procedures of bank. Moreover, it is
important to adhere to effective loan policies and procedures. As per the study, it has been
determined that Banking institutions are making their efforts in reducing time to resolve the
issue of public by altering lengthy policies and procedures. As, there exists a doubtful credit
risk which arises at the time of approving loans for the clients without any identification and
verification of their existence. Nevertheless, for this they will be using latest and modern
technologies and software which will help them in lowering down risks
5.2.3 Employee Productivity
Every bank and financial institutions majorly operate, and profit is generated by their
employees, so bank needs to regulate and focus on enhancing the productivity of their staff.
As per the study, it has been evaluated that if the productivity of employees is improved and
developed, then this can company to reduce chance of delay in lending process. In this
respect bank will use various motivational techniques and tools which will help in improving
and motivating employees. Thus, this will increase productivity of all staff members working
within operational framework. The productivity determines individual working capabilities
and performance which can assist in managing increasing profits and revenue.
5.2.4 Time Management
This is the most important factor of banking institution that is not allowing company
to perform in way it wants to. All sorts of approval and documentation are based on time that
is taken to perform each activity within banks. It has been analysed that most of the time is
consumed for the approval of personal loan which depends on authenticity of information
that is given by customers (Madrian, Hershfield and Rick, 2017). So, SME need to adopt new
technologies for reducing time taken for the approval of loan processing.
5.3 Recommendations
5.3.1 Introduction of new Program Lending - Automated Lending processes
The present SME lending process is manual based lending which is time consuming.
This is the core reason behind delay in processing of loan request. Therefore, there is a need
to introduce Program lending model. This will eliminate all the manual work management
50

which leads to a negative growth of lending process. As mentioned under cost benefit Table
4.13 the requested software adoption will not cost Qrs.1.5mio where the Program lending
model can be referred from the internal resources of our IT department staff. This will not
cost more than Qrs.100, 000/-. Through the recommended Program lending model processing
time will come down to 1 to 2 weeks from 6 to 8 weeks. This time management will give a
huge boost to lending process of Doha bank.
5.3.2 Periodical update of policy and procedures
The present usage of Doha bank’s small and medium lending policy and procedures
have been found to be outdated and lengthy. As the first step Doha bank need to revise the
policy and procedures to match the present market condition. The huge fundamental error
was that the bank does not follow proper mechanism to revise and update the policy and
procedures. Therefore, it can be recommended that the bank need to establish policy and
procedure committee for SME department and their main objective is to continuously
monitor and update it, in accordance with compliance, whenever there is a need of doing so.
The other factor was time taken in revising, proof reading, approving and uploading policies
and procedures. The new committee can help the bank in addressing and handling issue of
time delay.
5.3.3 Training and Development of SME employees.
Doha bank a small and medium unit is also facing issues in managing employee
productivity. This is mainly due to absorbing inexperience and non-productive staffs in
department. It is basically due to nationalisation of Qatar national policy. It’s highly
suggested to SME department to absorb trained staff. The necessity of a Bank’s credit
department is totally different from another department. This indicates industry or subject
knowledge and experience. Therefore, it can be recommended to Doha bank SME to intake
experienced credit staff and provide them continuous credit related trainings. In addition,
SME department is supposed to assess the staff productivity on continuous basis with the
help of online assessments and E leaning modules. Including this assessment into yearly
appraisal system will be more appropriate to enhance productivity of employees.
51

5.3.4 Turnaround Time implementation for processes
Unfortunately, Doha bank does not follow Turnaround time for small and medium
lending process. It is seen as huge set back. Therefore, it can be recommended to include and
implement turnaround time practices in SME process. Implementation of same will bring
immense benefits to the SME department looking into the procedures of lending.
Table 5.1 will show the 5W +1H model of Small and Medium lending of Doha bank.
Kipling’s Method
What is the problem? Turnaround time delay in SME lending model
When does it happened? SME Loan processing
Where is it happening? In SME loan department of Doha Bank
Why is it happening? Lengthy processes, strict policies and procedures of bank,
time consuming activities like documentation, management
of employee productivity.
Who do you need to get
involved?
The entire upstream from the inbound officers like SCM,
sales, finance, loan department and IT department
How can you overcome
this problem?
By reinvent the operational model and by developing a
system-based processes which help company to reduce their
work and operations.
Source: Author
52

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