Lending to Commercial Borrowers

Rationale:

Lending is one of the key activities of commercial banks. Although Bank’s with healthy portfolios are bound to reap appreciable returns, the activity also come with the risk that the borrower is likely to default on loan repayment. It is therefore incumbent on the lending bank to understand its client’s business and also the evaluate the prospect repaying its loan in a timely manner

Learning Objective:

• Understand the basic features and considerations in Commercial Lending especially to small companies
• Differentiate the different types of business customers with the objective of providing appropriate credit facilities
• Understand the credit facilities available to business customers
• Appreciate the use of financial statements in analyzing the credit worthiness of borrowers
• Have a sound appreciation of the various forms of security available to lenders
• Apply a standard framework in credit analysis

Course Content:

• Introduction to credit 
• The asset conversion cycle and business types
• Guidelines for effective lending – Appraisal techniques
• Types of Credit Facilities and key features
• Financial Statements in lending: introduction to the balance sheet, income statement and cash flow
• Collateral in lending: type, features, and realization
• Loan monitoring strategies
• Lending to a small business – case study