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Workshop on Advanced Techniques in Credit Assessment

Program Overview

The Advanced Techniques in Credit Assessment program equips banking professionals with practical and regulatory insights into credit risk management. Participants learn to evaluate borrower creditworthiness through financial and non-financial analysis, detect early warning signals, and assess the impact of economic conditions on lending. The course also covers working capital assessment, risk-based structuring, credit policy governance, and post-disbursement monitoring, enabling participants to strengthen credit decision-making and build resilient loan portfolios.

 

Objectives of the program:

  • Develop a thorough understanding of credit risk from both regulatory and practical perspectives
  • Identify and interpret key regulations impacting credit risk assessment in banks
  • Perform in-depth analysis of financial statements within the context of business practices, identifying key indicators of creditworthiness.
  • Detect early warning signals of credit risk and credit quality migration through financial, qualitative, and market indicators, enabling proactive risk management.
  • Analyze current economic conditions and their impact on bank lending and credit risk.
Topics
Days
Workshop on Advanced Techniques in Credit Assessment
2 Days
Total
2

What will you learn with this program:

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

  • Quick recap
  • Q&A

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

Methodology:

  • Exercises
  • Case Studies
  • Reflective Discussions
  • Sharing of Practical Experience

Targeted-groups:

This program is designed for officials engaged in Corporate Credit, Risk and Compliance, Project Finance, as well as Branch Managers and Relationship Managers who are directly involved in credit-related functions. It also caters to professionals aspiring to take on roles within the credit unit.

Duration:

2 days

Investment:

As per the standard rate