The slogan Colorado East Bank and Trust in Lamar uses to attract customers, "Helping make dreams come true," has certainly excited a group of bankers from the Republic of Moldova.
In June, six officers of Rural Finance Corp. in Chisinau, the capital of Moldova, visited Colorado East and Farmers State Bank in Fort Morgan. They wanted to learn how to underwrite agricultural loans better and to absorb American-style marketing, said Viorel Benderschi, the corporation's credit director. They were not disappointed.
Colorado East's tag line about dreams can catch the attention of would-be customers much more than a listing of the bank's services, he said.
"They are advertising to people to think of their wishes and of the possibilities that they could achieve by using the bank's services," Mr. Benderschi said from Moldova. "It's all about branding, and now we need to find a way to do that, too."
Dave Rehyer, the president of the $265 million-asset Colorado East, said it was interesting to work with bankers who are just learning to compete for business. (Formerly ruled by Romania, Moldova became part of the Soviet Union at the end of World War II and declared its independence in 1991, ending decades of living under an economy based on state-owned enterprises. It is the poorest country in Europe, according to the Central Intelligence Agency's Web site.)
"The thing that they wanted to learn most about was our marketing strategy," Mr. Rehyer said. "They wanted to learn basic things, like how we gained customer relationships and how we maintained them."
Formed in 1997, Rural Finance sets up credit associations that make ag loans. Mr. Benderschi said that, in addition to overseeing the associations, it now wants to make loans itself.
Though getting tips for acquiring customers was the main item on the agenda, the Moldovan officials also wanted to compare their underwriting practices with those of the Colorado banks, Mr. Benderschi said.
"I can say that the procedures are quite similar, but U.S. banks have access to more transparent information," he said. "They can get credit reports. They can rely on financial statements from the client" that can be validated relatively easily, "and they can know the real value of a house."
Moldovan banks are reluctant to provide information to credit bureaus, because they fear customer defections, Mr. Benderschi said. But he expects the parliament to enact a law in the next few years requiring banks to share their data.
Also, farmers' financial statements should become more accurate when there is a stable infrastructure, including more appraisers and other companies to validate documentation, he said. For now Rural Finance must determine creditworthiness mainly by conducting farm visits. Though credit quality has not suffered, the cost of doing business has risen, he said.
Mr. Rehyer said the Moldovans should consider other things, or credit quality could become a problem. "We told them that collateral-based lending is important, but cash flow is more important. The bankers need to know whether their customers have the ability to repay the loan."
That is not so critical now, because most loans are for $1,000 to $10,000, he said. But as borrowers grow and ask for larger amounts, the corporation must become more sophisticated in its underwriting.
Ronald L. Hays, a senior vice president at the $138 million-asset Farmers State, said the Moldovans were impressed that U.S. banks can rely on statistics about agricultural trends when underwriting loans. They also liked that banks could easily network with farmers and their support systems at agricultural extension centers.
"It was just so interesting to meet folks who are at the ground level of financing agriculture," he said. "It felt good to help them understand what makes American agriculture tick, and the interrelationship between farmers and their banks here."
Rural Finance operates much like a Farm Credit System association. During their visit to Colorado, Mr. Benderschi and his colleagues met with CoBank in Greenwood Village, a part of the Farm Credit System, to learn about using bonds for funding - something Rural Finance wants to do.
The $15 million-asset corporation, which receives most of its funds from the Moldovan government, the World Bank, and other international agencies, will need much more as it grows, Mr. Benderschi said.
The Moldovans' tour was arranged by two longtime Colorado banking consultants, Richard Fenwick and William Maltby, on behalf of the Citizens Network for Foreign Affairs. The Washington nonprofit facilitates partnerships between U.S. farmers and ag-related businesses and companies in developing countries.
