Credit Risk Management & Portfolio Quality

Program overview

📘 Training Program: Credit
Risk Management & Portfolio QualityTarget Audience: Credit
officers, branch managers, risk managers, SACCO committee members, internal
auditors
Duration: 3 days (modular)
Methodology: Case studies, group work, role plays, real portfolio
analysis 📊 Training Materials Included
Trainer
slides (PowerPoint)
Participant
manual
Case
study handbook
PAR
calculation templates (Excel)
Credit
policy sample
Monitoring
checklist




🎯 Expected OutcomesAfter training, participants will:
















Reduce
PAR levels
Improve
loan appraisal quality
Strengthen
recovery systems

Learning outcomes

By the end of this program, you will be able to:

• 🔹 MODULE 1: Introduction to Credit Risk in MFIs & SACCOsObjectives Understand credit risk in microfinance context Appreciate Rwanda-specific risks (informal sector, agriculture, MSMEs) Content Definition of credit risk Types of risks: Default risk Concentration risk Operational credit risk Unique characteristics in Rwanda: Agriculture dependency Informal income verification Group lending dynamics Activity Identify top 5 credit risks in your institution 🔹 MODULE 2: Credit Risk Management FrameworkObjectives Build a structured risk management system Content Components of a credit risk framework: Credit policy Risk appetite Governance structure Internal controls Roles & responsibilities: Board Credit committee Management Credit officers Regulatory context (BNR guidelines for MFIs & SACCOs) Tool Sample Credit Policy Template 🔹 MODULE 3: Client Appraisal & Credit AnalysisObjectives Improve loan appraisal quality Content The 5 Cs of Credit: Character Capacity Capital Collateral Conditions Cash flow analysis (for informal clients) Loan sizing techniques Household vs business cash flow Agricultural lending considerations Practical Exercise Analyze a real borrower case 🔹 MODULE 4: Loan Structuring & ApprovalObjectives Design appropriate loan products Content Loan terms: Tenure Interest rates Grace periods Matching repayment schedules to cash flow Avoiding over-indebtedness Credit committee best practices Case Study Poor vs well-structured loan 🔹 MODULE 5: Portfolio Quality ManagementObjectives Understand and monitor portfolio health Key Indicators1. Portfolio at Risk (PAR) PAR > 30 days PAR > 90 days 👉 Key concept: Measures outstanding balance of loans overdue 2. Write-off Ratio Loans written off / total portfolio 3. Loan Loss Provisioning Expected vs actual losses 4. Portfolio Yield Portfolio Quality Benchmarks (Typical for MFIs) PAR > 30 days: < 5% (good) Write-off ratio: < 2% Exercise Calculate PAR using sample data 🔹 MODULE 6: Loan Monitoring & Early Warning SystemsObjectives Detect problems early Content Monitoring tools: Repayment tracking Client visits SMS reminders Early warning signs: Missed installments Business decline Multiple borrowing Use of MIS systems Practical Build an early warning checklist 🔹 MODULE 7: Delinquency Management & RecoveryObjectives Reduce default rates Content Collection strategies: Soft collections (calls, visits) Hard collections (legal action) Aging of arrears: 1–30 days 31–60 days 61–90 days o    90 days Restructuring vs refinancing Role Play Handling a delinquent client 🔹 MODULE 8: Credit Risk Mitigation StrategiesObjectives Reduce exposure to losses Content Diversification: Sector Geography Client type Collateral management Group lending methodology Credit insurance (where applicable) 🔹 MODULE 9: Governance & Internal ControlsObjectives Strengthen institutional discipline Content Segregation of duties Internal audit role Fraud prevention Credit committee oversight Rwanda Context SACCO governance challenges: Political influence Weak controls Insider lending 🔹 MODULE 10: Digital Credit & Emerging RisksObjectives Understand new risks Content Mobile lending risks Data-driven credit scoring Cyber risk Over-indebtedness from digital loans 🔹 MODULE 11: Reporting & Risk MonitoringObjectives Improve decision-making Content Credit risk dashboards: PAR trends Disbursement vs repayment Sector exposure Reporting to: Management Board Regulators (BNR) 🔹 MODULE 12: Case Studies (Rwanda Context)Case 1: SACCO with High PAR (>20%) Causes: Poor appraisal Political interference Solutions: Tighten credit policy Strengthen recovery Case 2: MFI Rapid Growth → Portfolio Deterioration Causes: Aggressive lending Lessons: Growth vs quality balance Build sustainable portfolios

Live sessions & support

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