Training Contents: Day 1
Participant introductions & context setting
- Ice-breaking & participant expectations
- Typical credit process in Nepalese banks
- Key challenges: documentation, promoter dependency, slow systems
Credit risk basics: understanding lending risk
- What is credit risk and why it matters
- Components of credit risk: borrower, business, financial, structural
- Credit risk: key learnings from recent defaults
Types of bank facilities & associated risk
- Term loans vs. Working capital loans
- Fund based (cash credit, overdraft, term loans) vs. Non-fund based (LCs, BGs)
- How risks differ across facility types
- Structuring facilities as per business cycle
Industry & business risk assessment
- Understanding borrower business model
- Key risk factors by sector (manufacturing, trading, hydropower, construction)
- External risks – regulatory, import restrictions, foreign exchange
Management & Non-Financial risk assessment
- Promoter background check and integrity assessment
- Related party risks, group exposure
- Governance and succession concerns in family businesses
Financial Statement Analysis for Credit Appraisal
- Identifying early warning signs from financials
- Key ratios for SMEs (liquidity, leverage, profitability)
- Cash flow importance
- Debt service coverage ratio (DSCR) and sensitivity
Recap
Training Contents: Day 2
Working capital assessment
- Working capital assessment
- Operating cycle
- Bank finance eligibility
Collateral, security & structuring risks
- Role and limitations of collateral in lending
- Legal enforceability, valuation, insurance
- Structuring facilities to mitigate risks (margins, covenants, monitoring)
Credit risk assessment for RMs and Risk Team
- How to build a robust loan book
- How to write objective proposals
- Reviewing proposals, common pitfalls, risk appetite alignment
Credit policy & risk Governance
- Key components of a sound credit policy
- Risk appetite framework and exposure limits
- Delegation of powers, approval matrix
- Early warning systems, watchlist mechanism
Credit monitoring
- Post-disbursement monitoring practices
- Common stress triggers in borrowers
- Corrective action plans and restructuring approach
Wrap-Up
- Comprehensive case study
- Group presentations & feedback
- Key takeaways