Non-Performing Loans (NPL) Management Training Course

This course provides a practical and strategic understanding of how financial institutions manage non-performing loans (NPLs). It focuses on early identification, classification, monitoring, recovery strategies, and regulatory compliance. Participants will gain hands-on knowledge in loan restructuring, collections management, legal recovery processes, and portfolio clean-up to improve asset quality and financial performance.

Target Groups

• Credit risk managers and analysts
• Loan officers and credit administrators
• Bank and microfinance professionals
• Collections and recovery officers
• Legal and compliance officers
• Asset management company staff
• Internal auditors and regulators
• Financial consultants and advisors
• Development finance institution staff
• Finance and business students

Course Objectives

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

• Understand the causes and impact of NPLs
• Identify early warning signs of loan distress
• Classify and measure non-performing loans
• Develop effective NPL management strategies
• Apply loan restructuring and workout techniques
• Implement recovery and collections strategies
• Navigate legal and regulatory frameworks
• Reduce credit losses and improve portfolio quality
• Strengthen credit monitoring systems
• Enhance overall risk management practices

Course Modules

Module 1: Introduction to Non-Performing Loans

• Definition and classification of NPLs
• Causes of loan default
• Impact on financial institutions
• Key performance indicators (NPL ratios)
• Regulatory definitions and standards

Module 2: Early Warning Systems and Credit Monitoring

• Identifying early warning signals
• Monitoring borrower behavior
• Credit review processes
• Portfolio surveillance tools
• Preventive risk management

Module 3: Loan Classification and Provisioning

• Loan grading systems
• IFRS 9 expected credit loss (ECL) model
• Provisioning requirements
• Write-offs and recoveries
• Regulatory compliance standards

Module 4: NPL Resolution Strategies

• Loan restructuring and rescheduling
• Debt refinancing and consolidation
• Out-of-court settlements
• Distressed asset sales
• Role of asset management companies

Module 5: Collections and Recovery Management

• Collections strategies and techniques
• Negotiation and borrower engagement
• Recovery planning and execution
• Performance tracking of collections
• Use of technology in collections

Module 6: Legal and Regulatory Frameworks

• Legal recovery processes
• Collateral enforcement
• Insolvency and bankruptcy procedures
• Regulatory guidelines on NPL management
• Compliance and reporting requirements

Module 7: Collateral Management

• Types of collateral and valuation
• Collateral monitoring and revaluation
• Risk mitigation through collateral
• Realization of collateral
• Legal considerations in collateral recovery

Module 8: NPL Portfolio Management

• NPL portfolio segmentation
• Sale and securitization of bad loans
• Portfolio clean-up strategies
• Risk transfer mechanisms
• Performance measurement

Module 9: Data Analytics in NPL Management

• Use of data in credit monitoring
• Predictive analytics for default risk
• Automation of collections processes
• Reporting and dashboards
• Digital transformation in NPL management

Module 10: Capstone Project and Case Studies

• NPL management case study
• Loan restructuring simulation
• Recovery strategy development exercise
• Portfolio clean-up project
• Emerging trends including AI-driven credit monitoring, digital collections platforms, regulatory technology (RegTech), and integration of ESG considerations in credit risk management