Most problem loans involve some breach of discipline in principle, policy, procedure or judgment. This module outlines a framework for establishing credit discipline in a MFI. The module then reviews the components of an effective credit administration process: a written loan policy, an asset quality rating system, a formal loan pricing system, an effective committee process, a strong credit administration and loan review function, well-trained lending officers, and a positive lending environment. When combined, these components result in a quality loan portfolio. The integration of all the aspects of credit administration is termed credit discipline. This program provides an understanding of the critical components of strong and positive credit culture.
This course is designed for credit managers, loan officers, credit analysts and loan administration and good governance personnel, regardless of level or experience, to provide an enhanced perspective or refreshed understanding of critical components of strong and positive credit culture.
This program will address the following key issues:
Why discipline is so needed and so important to successful lending leadership and practice;
Objective of loan discipline
Framework for establishing credit discipline
Advantages of compliance with credit discipline
advantages of teaching borrowers credit discipline
How to institute loan discipline effectively
Characteristics of strong and positive credit culture;
Role of sound, effective policy;
Importance of portfolio vision in achieving a discipline environment;
Importance of measurement and objective performance evaluation – feeling right may not be enough confirmation of best practices; and
MFI’s response and tolerance towards breach of disciplines