Credit Risk Management Training Course

This course provides a comprehensive understanding of credit risk principles, frameworks, and practices in financial institutions and corporations. Participants will learn how to assess borrower creditworthiness, develop risk rating systems, apply risk mitigation tools, and manage credit portfolios. With a blend of theory and case studies, the course equips professionals with the skills to anticipate defaults, reduce exposure, and align credit risk management with regulatory requirements.

Target Groups

• Credit risk managers and analysts
• Commercial and corporate bankers
• Finance and accounting professionals
• Internal auditors and compliance officers
• Treasury and portfolio managers
• Risk consultants and advisors
• Students pursuing careers in banking and financial risk management

Course Objectives

By the end of this course, participants will be able to:

1. Understand the fundamentals of credit risk and its impact on business performance.
2. Assess borrower creditworthiness using qualitative and quantitative approaches.
3. Apply credit scoring and internal rating systems.
4. Identify, measure, and monitor credit exposure.
5. Develop strategies for credit risk mitigation.
6. Structure loan agreements with appropriate covenants.
7. Implement portfolio management techniques to reduce concentration risk.
8. Apply stress testing and scenario analysis in credit risk assessment.
9. Align credit risk practices with Basel and regulatory requirements.
10. Strengthen governance and reporting frameworks for credit risk oversight.

Course Modules

Module 1: Introduction to Credit Risk Management

• Nature and types of credit risk
• Importance in banking and corporate finance

Module 2: Borrower Creditworthiness Assessment

• Qualitative and quantitative methods
• Financial statement analysis
• Industry and market factors

Module 3: Credit Scoring and Rating Systems

• Credit scoring models
• Internal vs. external ratings
• Probability of default (PD), loss given default (LGD), and exposure at default (EAD)

Module 4: Loan Structuring and Covenants

• Designing effective loan agreements
• Security and collateral requirements
• Covenants and credit terms

Module 5: Credit Risk Mitigation Tools

• Guarantees and collateral management
• Credit derivatives and insurance
• Netting agreements

Module 6: Portfolio Credit Risk Management

• Diversification and concentration risk
• Portfolio analysis techniques
• Credit portfolio optimization

Module 7: Stress Testing and Scenario Analysis

• Designing stress scenarios
• Assessing portfolio resilience
• Regulatory stress testing practices

Module 8: Basel and Regulatory Frameworks

• Basel II, III, and evolving requirements
• Capital adequacy and risk-weighted assets
• Supervisory expectations

Module 9: Governance and Internal Controls

• Role of credit committees
• Internal control mechanisms
• Independent review and audit

Module 10: Emerging Issues in Credit Risk

• Credit risk in digital lending
• ESG considerations in credit risk
• Lessons from global financial crises