BASIC CONCEPTS OF CREDIT RISK AND THE CRM FRAMEWORK

About Course

This 80-hour course introduces participants to the fundamental concepts of credit risk and the Credit Risk Management (CRM) framework. It covers the processes and methodologies for identifying, assessing, monitoring, and mitigating credit risk in various financial and business environments. Participants will learn how to apply risk management tools, understand regulatory requirements, and adopt best practices for maintaining the creditworthiness of clients and portfolios.

Through a mix of theoretical discussions, case studies, and practical exercises, the course equips participants with the skills to analyze credit risk, use credit scoring models, implement CRM strategies, and evaluate the financial health of businesses. By the end of the course, participants will have a strong understanding of how to manage credit exposure and safeguard financial stability.

Understand the fundamentals of credit risk and its impact on financial institutions and businesses.
Identify and assess credit risk using various analytical tools and techniques.
Implement the Credit Risk Management (CRM) framework in business settings.
Analyze and interpret financial statements to evaluate creditworthiness.
Develop effective credit policies and procedures that minimize risk.
Utilize credit scoring models and ratings to determine credit risk levels.
Monitor credit risk exposures and take corrective actions to mitigate potential losses.
Understand regulatory requirements related to credit risk management.
Apply stress testing and scenario analysis in assessing credit risk.
Implement credit risk mitigation techniques such as collateral management and guarantees.

Course Content

PRE-TEST

Self-Assessment
Pre-Assessment

MODULE 1: INTRODUCTION TO CREDIT RISK

MODULE 2: CREDIT RISK ANALYSIS AND ASSESSMENT

Introduction

00:00
Lesson 1: Analyzing Creditworthiness: Key Factors and Indicators

00:00
Lesson 2: Credit Risk Metrics: Probability of Default (PD), Exposure at Default (EAD), and Loss Given Default (LGD)

00:00
Lesson 2.1: Probability of Default

00:00
Lesson 2.2: Exposure at Default

00:00
Lesson 2.3: Loss Given Default

00:00
Lesson 3: Using Financial Ratios to Assess Credit Risk

00:00
Lesson 4: Case Study: Evaluating a Company’s Creditworthiness

00:00
Quiz 2

MODULE 3: CREDIT RISK MANAGEMENT FRAMEWORK (CRM)

MODULE 4: CREDIT SCORING AND RATING MODELS

MODULE 5: FINANCIAL STATEMENT ANALYSIS FOR CREDIT RISK

Introduction

00:00
Lesson 1: Understanding Financial Statements: Balance Sheets, Income Statements, and Cash Flow Statements

00:00
Lesson 1.1: Balance Sheets

00:00
Lesson 1.2: Income Statement

00:00
Lesson 1.3: Cash Flow Statement

00:00
Lesson 2: Key Financial Ratios for Credit Risk: Liquidity, Profitability, and Solvency

00:00
Lesson 2.1: LIquidity Ratios

00:00
Lesson 2.2: Profitability Ratios

00:00
Lesson 2.3: Solvency Ratios

00:00
Lesson 3: Common Red Flags in Financial Statements: Early Warning Signs of Credit Risk

00:00
Lesson 4: Case Study: Analyzing a Company’s Financial Health for Credit Decision

00:00
Quiz 5

MODULE 6: CREDIT RISK MONITORING AND REPORTING

MODULE 7: CREDIT RISK MITIGATION TECHNIQUES

Introduction
Lesson 1: Collateral Management: Types, Valuation, and Monitoring

00:00
Lesson 1.1: Types of Collateral Management
Lesson 1.2: Valuation of Collateral Management

00:00
Lesson 1.3: Monitoring
Lesson 2: Use of Guarantees and Credit Derivatives for Risk Mitigation

00:00
Lesson 3: Credit Insurance and Securitization as Risk Mitigation Tools

00:00
Lesson 3.1: What is Credit Insurance

00:00
Lesson 3,2: Risk Mitigation Tools
Lesson 4: Case Study: Implementing Credit Risk Mitigation in a Real-World Context

00:00
Quiz 7

MODULE 8: CREDIT RISK IN DIFFERENT CONTEXTS

MODULE 9: REGULATORY COMPLIANCE AND RISK GOVERNANCE

MODULE 10: BEST PRACTICES AND EMERGING TRENDS IN CREDIT RISK

POST TEST

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About Course

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Course Content

PRE-TEST

Self-Assessment

Pre-Assessment

MODULE 1: INTRODUCTION TO CREDIT RISK

Introduction

Lesson1: Understanding Credit Risk: Definition, Types, and Sources

Lesson 1.1: Definition of Credit Risk

Lesson 2: The Importance of Credit Risk Management in Financial Institutions

Lesson 3: Key Stakeholders in Credit Risk Management

Lesson 4: Overview of Credit Risk Regulations and Compliance (Basel III)

Quiz 1

MODULE 2: CREDIT RISK ANALYSIS AND ASSESSMENT

Introduction

Lesson 1: Analyzing Creditworthiness: Key Factors and Indicators

Lesson 2: Credit Risk Metrics: Probability of Default (PD), Exposure at Default (EAD), and Loss Given Default (LGD)

Lesson 2.1: Probability of Default

Lesson 2.2: Exposure at Default

Lesson 2.3: Loss Given Default

Lesson 3: Using Financial Ratios to Assess Credit Risk

Lesson 4: Case Study: Evaluating a Company’s Creditworthiness

Quiz 2

MODULE 3: CREDIT RISK MANAGEMENT FRAMEWORK (CRM)

Introduction

Lesson 1: Overview of the CRM Framework: Key Components and Stages

Lesson 2: Developing a Credit Risk Policy and Procedure Manual

Lesson 2.1: Credit Policy Manual

Lesson 3: Credit Approval Process: Steps and Decision-Making Criteria

Lesson 4: Risk Appetite and Limits: Setting Appropriate Credit Exposure Levels

Quiz 3

MODULE 4: CREDIT SCORING AND RATING MODELS

Introduction

Lesson 1: Introduction to Credit Scoring Models: Qualitative and Quantitative Approaches

Lesson 2: Understanding Credit Ratings: Internal and External Models

Lesson 3: Using Credit Scoring Software for Risk Assessment

Lesson 4: Case Study: Applying a Credit Scoring Model in a Lending Scenario

Quiz 4

MODULE 5: FINANCIAL STATEMENT ANALYSIS FOR CREDIT RISK

Introduction

Lesson 1: Understanding Financial Statements: Balance Sheets, Income Statements, and Cash Flow Statements

Lesson 1.1: Balance Sheets

Lesson 1.2: Income Statement

Lesson 1.3: Cash Flow Statement

Lesson 2: Key Financial Ratios for Credit Risk: Liquidity, Profitability, and Solvency

Lesson 2.1: LIquidity Ratios

Lesson 2.2: Profitability Ratios

Lesson 2.3: Solvency Ratios

Lesson 3: Common Red Flags in Financial Statements: Early Warning Signs of Credit Risk

Lesson 4: Case Study: Analyzing a Company’s Financial Health for Credit Decision

Quiz 5

MODULE 6: CREDIT RISK MONITORING AND REPORTING

Introduction

Lesson 1: Credit Risk Monitoring Techniques: Early Warning Systems and Credit Review

Lesson 2: Stress Testing and Scenario Analysis: Tools for Assessing Credit Risk Exposure

Lesson 3: Credit Risk Reporting: Communicating Risk to Stakeholders

Lesson 4: Managing a Credit Portfolio: Diversification and Risk Mitigation Strategies

Quiz 6

MODULE 7: CREDIT RISK MITIGATION TECHNIQUES

Introduction

Lesson 1: Collateral Management: Types, Valuation, and Monitoring

Lesson 1.1: Types of Collateral Management

Lesson 1.2: Valuation of Collateral Management

Lesson 1.3: Monitoring

Lesson 2: Use of Guarantees and Credit Derivatives for Risk Mitigation

Lesson 3: Credit Insurance and Securitization as Risk Mitigation Tools

Lesson 3.1: What is Credit Insurance

Lesson 3,2: Risk Mitigation Tools

Lesson 4: Case Study: Implementing Credit Risk Mitigation in a Real-World Context

Quiz 7

MODULE 8: CREDIT RISK IN DIFFERENT CONTEXTS

Introduction

Lesson 1: Credit Risk in Corporate Lending

Lesson 3: Credit Risk in Retail and Consumer Lending

Lesson 3: Credit Risk in SME Lending

Lesson 4: Credit Risk in Trade Finance and International Markets

Quiz 8

MODULE 9: REGULATORY COMPLIANCE AND RISK GOVERNANCE

Introduction