Advanced Credit Risk Management

Course overview

In order to be approved for a loan or to make payments for products and services over a prolonged period of time, businesses or people must go through the credit evaluation procedure. When assessing credit requests, this rule also applies to enterprises and lenders, including banks.

Credit risk analysis is a procedure to evaluate the risk or potential for borrower repayment failures and the monetary losses to the company as a result of these failures. The possibility that the lender won’t get the principle and interest might lead to cost increases and cash flow disruptions.

With the help of this Trainee Bee course, you will be fully informed and knowledgeable about the assessment, modeling, and management of credit risk.

You will be better able to manage and analyses credit risk in your business, which will increase your possibilities for professional advancement.

You would also be able to take on positions at a worldwide level with the information you would acquire from this course, expanding your opportunities for professional advancement.

Introduction

Credit risk evaluation, modeling, and management is a specialist field of financial risk management that focuses on analyzing credit risk and developing measures to minimize credit losses. Credit risk is the risk of default associated with the potential of an individual, group, or entity to fail to meet their financial obligations. It can involve a financial institution providing a loan or other form of credit to a customer or a debt instrument purchased in the financial markets. Credit risk evaluation involves the assessment of an entity’s ability to repay a loan or fulfill future obligations, while credit risk modeling entails the use of quantitative techniques to understand a borrower’s credit risk. Commonly used credit risk modeling techniques include probability models, time series models, and macro-level models. Lastly, credit risk management involves developing policies and processes to effectively identify and monitor credit risk, as well as access and manage the potential for credit losses.

We are The Training Bee, a global training and education firm providing services in many countries. We are specialized in capacity building and talent development solutions for individuals and organizations, with our highly customized programs and training sessions.

Learning Objectives

Upon completing Advanced Credit Risk Management, participants will be able to:

Get a comprehensive grasp of credit risk assessment, modeling, and management
Use cutting-edge techniques to assess and manage risks for your company
Create and implement efficient credit risk management models to protect organization interests and promote organizational growth.
Mentor other professionals in the evaluation, modeling, and management of credit risk
Managing several tasks and credit risk-related duties shows one’s ability to take on more challenging positions and responsibilities in support of professional advancement.

Our Unique Training Methodology

This interactive course comprises the following training methods:

Journaling – This consists of setting a timer and letting your thoughts flow, unedited and unscripted recording events, ideas, and thoughts over a while, related to the topic.
Social learning – Information and expertise exchanged amongst peers via computer-based technologies and interactive conversations including Blogging, instant messaging, and forums for debate in groups.
Interactive sessions – The course will use informative lectures to introduce key concepts and theories related to the topic.
Presentations – Participants will be presented with multimedia tools such as videos and graphics to enhance learning. These will be delivered engagingly and interactively.
Group discussions – The course will incorporate group discussions and debates to encourage active participation and collaboration.
Case studies – Participants will be presented with realistic scenarios and case studies that demonstrate effective strategies related to the topic. These activities will encourage participants to think critically and apply their knowledge to real-life situations.

Training Medium

This Advanced Credit Risk Management training is designed in a way that it can be delivered face-to-face and virtually.

Course Duration

This training is versatile in its delivery. The training can be delivered as a full-fledged 40-hour training program or a 15- hours crash course covering 5 hours of content each day over 3 days

Pre-course Assessment

Before you enroll in this course all we wanted to know is your exact mindset and your way of thinking.
For that, we have designed this questionnaire attached below.

What are the primary objectives of credit risk analysis?
What techniques and tools do you use to evaluate credit risk?
How do you identify and evaluate potential credit risks?
What methods do you employ to reduce credit risk?
How do you assess the impact of credit risk on a customer’s financial health?
As a credit risk manager, how do you monitor and manage expected credit losses?

Course Modules

This Advanced Credit Risk Management covers the following topics for understanding the essentials of the Agile Workplace:

Module 1 – The Five Cs of Credit

Character
Capacity
Capital
Collateral
Conditions

Module 2 – Guidelines for Lending

Liquidity
Safety
Diversity
Stability
Profitability

Module 3 – various loan types

Long-term borrowing
Short-term borrowing
Access to credit
Various forms of financing

Module 4 – Financial Ratios for Credit Risk Evaluation Using Altman’s Z-Score

Cash flow / total assets
Total assets / Retained Earnings
Total assets minus earnings before interest and taxes
Equity market value divided by total liabilities
Total assets / Sales

Module 5 – Types of Credit Letters

Revocable
Irrevocable
Sight Term Confirmed
Revolving Transferable
Standby
Clause in red

Module 6 – Calculation of Default Probability

Merton’s model
Model Jarrow–Turnbull
The model of mean value
The CRE paradigm

Module 7 – Financial Status Indicator for Businesses

Financial system
Earning potential
Operating potential Debt-paying potential

Module 8 – How to Reduce Credit Risk Effectively

Credit policies in writing
Standard credit terms and conditions
Decision-making/underwriting expertise
Power to approve loans
A mechanism that manages credit risk
Accuracy of loan paperwork

Post-course Assessment

Participants need to complete an assessment post-course completion so our mentors will get to know their understanding of the course. A mentor will also have interrogative conversations with participants and provide valuable feedback.

What are the key components of a successful credit risk evaluation, modeling, and management process?
How can you use quantitative methodologies to analyze credit risk for an organization?
What are the key challenges and risks involved when assessing credit risk exposures?
What strategies or techniques have you used to review existing credit risk models for accuracy and appropriateness?
What structures and techniques should be included in a credit risk management framework?
How can organizations integrate their existing risk management infrastructure into the credit risk evaluation, modeling, and management process?

Lessons Learned

The most important lesson to learn from a specialist in credit risk evaluation, modeling, and management is that while financial models can provide an accurate indication of the risk associated with a credit transaction, banking and lending institutions should always take a holistic and qualitative approach to assessing credit risk. A model can detail the potential losses in a credit transaction, but other factors such as lender reputation, borrower credit history, and macroeconomic trends should all be analyzed to give a more complete picture. Without a wide-ranging examination of the risk factors, decisions regarding a credit transaction will be incomplete and could lead to financial losses.

“ If you require a Credit Risk Evaluation, you should seek for me.”