CHARTERED INSTITUTE OF CREDIT MANAGEMENT, GHANA …cicmgh.org/wp-content/uploads/2019/08/Revised-PCP-Syllabus-2019 … · The Council affirms that the sole objective of the Chartered

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CHARTERED INSTITUTE OF CREDIT MANAGEMENT, GHANA (CICMG)

PROFESSIONAL CERTIFICATION PROGRAMME

OUTLINE OF SYLLABUSES AND GUIDELINES

2019

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CONTENTS

The Institute …………………………………………………………………………...2

Credit Management in Modern Organizations……………………………..............3

Programme Structure …………………………………………………………………5

General Guidelines…………………………...………………………………………45

Examination Period…………………………………………………………………..46

Professional Certification Board …………………………………………………....46

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THE INSTITUTE

The Chartered Institute of Credit Management (Ghana) has been incorporated in

Ghana under the Professional Bodies Registration Act, 1973 (NRCD 143). The

Council affirms that the sole objective of the Chartered Institute of Credit

Management, Ghana is to provide sterling education and training to enable persons

qualify to practice or engaged in the practise of credit, risk and banking.

It is important stride toward management and without it, a financial institution,

credit bureaus, trade organisations, debt collection agency employees cannot hope

to climb very far in the profession

THE MISSION

The Council affirms that the sole objective of the Chartered Institute of Credit

Management, Ghana is to provide sterling education and training to enable

persons qualify to practice or engaged in the practise of credit, risk and banking.

CREDIT MANAGEMENT IN MODERN ORGANISATIONS

The credit risk management function has changed dramatically. The function has

expanded beyond its previous focus on lending management activities. In

modern organizations, the credit practitioner is expected to add value to the

business by designing and aligning credit risk models, systems and policies with

corporate goals and strategies.

Value addition credit practice or management requires the possession of

professional Credit Management knowledge, skills, values and attitudes which

come only with professional training.

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It is against this background that the professional certification programme

(PCP) was designed and launched in April, 2017.

The programmed is designed to provide profession training for persons who

desire to practise credit risk management in organisations.

The CICMG Professional Qualification comprises three levels. The 3-level

structure is set out as below:

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CICMG PROFESSIONAL QUALIFICATION PROGRAMME

LEVEL TITLE OF PAPER

LEVEL I (KNOWLEDGE) Principle of Credit Management

Business Communication and Personal Skills

Quantitative Tools in Business

Commercial Law

Information Communication Technology

LEVEL II (SKILLS) Credit Management – Lending

Business Environment

Export /International Credit

Laws Governing Credit Practice

Accounting Principles

Trade Credit Management

LEVEL II (PROFESSIONAL) Advanced Corporate Lending

Governance, Risk and Ethics

Process Improvement

Debt Recovery Procedure and Practice

Credit Practise

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LEVEL I (KNOWLEDGE)

SUBJECT NO.1 PRINCIPLE OF CREDIT MANAGEMENT

GENERAL OBJECTIVE

This subject is intended to equip the candidate with the knowledge, skills and

attitude that will enable him/her to apply to concepts, systems and techniques

of credit management

LEARNING OUTCOMES

A candidate who passes this subject should be able to:

(a) Apply the principles of credit in a business environment

(b) Analyse the effects of cost of credit to the business and economy as a

whole

(c) Perform debt collections

(d) Organise and supervise as credit risk department

INDICATIVE CONTENT

Introduction to credit

Definition of credit

History of credit

Reason for and benefits of extending credit

Effect of credit to the business

Categories of credit (consumer; trade and export credit)

Credit department structure and responsibilities

Organisational structure of a credit department

Role of the credit department within an organisation

Reporting lines of a credit department within an organisation

Reporting performance of a credit department

Credit department staff recruitment and retention

Promoting relationship (between credit department with other

departments within the organisation)

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The Credit Policy

Definition of a credit policy

Objectives of a credit policy

Types of credit policy

Features of a credit policy

Advantages of a credit policy

Contents of a credit policy

Formulation and implementation of a credit policy

Operational principles of a credit policy

Factors to consider when developing a credit policy

Credit risk management

Credit risk defined

Forms of credit risk

Distinction between credit management and risk management

Common causes of credit risk situations

Objectives of credit risk management

Role of senior management and Board of directors in risk management

Best practices in credit risk management

Credit scoring

Methods against credit risk hedging

Credit culture

Credit Insurance

Sales Ledger Administration

Definition of sales ledger

Sales ledger format and contents

Statements and reports

Sales ledger control

Importance and interpretation of a sales ledger Credit Terms

Definition of credit terms

Factors affecting determination of credit terms

Types of credit terms

Effects of credit terms on working capital management

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Payment Methods

Definition of payment method

Factors to consider in choosing payment method

Types of payment methods

Advantages and disadvantages of various payment methods

Collection Management

Overview of collections

Establishing targets

Collection planning

Collection cycle

80/20 principle application in collections

Collection tools and methods

Computer as an aid to collection

Communication with defaulters

Tracing gone away debtors

Restructuring of debts

Rules for effective collection practices

Mistakes made during collection

Reasons for delays in payments

Third party collectors

Collection through alternative dispute resolutions (ADR)

Legal process for debt recovery Credit Insurance

Definition of credit insurance

Characteristics of a good credit insurance cover

Basic principles of domestic credit insurance

Financing of credit insurance premiums

Benefits of credit insurance to an organisation

Types of credit insurance policies

Advantages and disadvantages of credit insurance

Automation of Credit Function

Process of automating of credit function

Benefits of automating credit operations

Types of credit management information software

Customer master file

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Online credit management

Billing management system Emerging Issues and Trends

SUBJECT NO.2 BUSINESS COMMUNICATION AND PERSONAL SKILLS

GENERAL OBJECTIVE


attitudes required for credit controller and debt collection specialist and

enforcement work.

LEARNING OUTCOMES:

A candidate who passes this subject should be able to: (a) Understand the personal skills and behaviours required at work. (b) Know how to communicate in the business environment.

(c) Be able to use effective communication and personal skills to build good relationships with colleagues and customers.

INDICATIVE COURSE CONTENT

Personal skills and behaviours required at work

Importance of a range of personal skills

Identification of personal strengths and challenges

Organisational measurement of quality of telephone collections

Communication in the business environment

Effective communication using a variety of media

Building good relationships with colleagues and customers

Resolving issues using communication and personal skills

Effective team working

Progressive business communications and personal skills

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SUBJECT NO.3 QUANTITATIVE TOOLS IN BUSINESS

GENERAL OBJECTIVE

This subject is intended to equip the candidate with knowledge, skills and

attitudes that will enable him/her to use quantitative analysis tools in business

operations and decision making

LEARNING OUTCOMES


(a) Apply accurately the key tools of basic maths in simple business and

accounting

(b) Apply accurately both numerically and graphically equations and

inequalities in simple business

(c) State, explain and apply the key tools of mathematics used in business

finance problems

(d) Apply accurately in simple business-related situations the key tools of

basic calculus State, explain and apply key measures of central tendency

in business related situations

(e) State, explain and apply key measures of dispersion in business related

situations

(f) State, explain and apply rules of probability in business related situations

(g) Apply accurately in simple business situations basic tools of financial and

operational forecasting

INDICATIVE CONTENT

Review of basic mathematics

Fractions

Percentages

Algebra

Powers and indices

Sequence and series

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Equalities and inequalities

Coordinates and graphs

Straight line equations

Simultaneous equations

Curves

Inequalities

Mathematics of business finance

Compound interest

Discounting and the time value of money

Annuities

Present value of annuities

Sinking funds and amortisation

Elements of calculus

Uses of calculus

Differentiation

Integration

Identification and determination of stationary points

Elements of optimisation (Maximum and minimum)

Linear Programming

Simplex method

Graphical method

Data collection

Frequency distributions – simple and cumulative

Histograms, frequency polygons and ogives

Measures of central tendency

The concepts of averages

The arithmetic mean

The median

The mode

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Quartiles

Measures of dispersion

The concept of dispersion

Range

Mean deviation

Quartile deviation

Standard deviation

Variance

Probability

Basic rules of probability

Mutually exclusive, independent and conditional probability

Expected values

Tree diagrams

The normal distribution

Forecasting

Time series

Correlation and Regression Analysis

Trend, seasonal variations, cyclical variations and random variations

Moving average trend

Forecasting

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SUBJECT NO.4 COMMERCIAL LAW

GENERAL OBJECTIVE


attitudes that will enable him/her to apply the principles and provisions of

business law in various business environments.

LEARNING OUTCOMES


(a) Demonstrate knowledge of essential elements of the legal system

(b) Demonstrate knowledge of legal personality

(c) Apply law of contract and tort in various scenarios

(d) Apply general principles of business law in practice

INDICATIVE CONTENT

Elements of the Legal System Nature, purpose and classification of law

Meaning of law

Nature of law

Purpose of law

Classification of law

Law and morality

Sources of law

The Constitution

Legislation

Substance of common law and doctrines of equity

African customary law

Islamic law

Judicial precedent

General rules of international law and ratified treaties

Administrative law

Meaning of administrative law

Functions of administrative laws

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Doctrine of separation of powers

Principles of natural justice

Judicial control of the Executive

The court system

Establishment, structure, composition and jurisdiction of courts

Supreme Court

Court of Appeal

High Court

Magistrates Court

Circuit Court

Alternative dispute resolutions

Nature of alternative dispute resolutions (ADR)

General principles of ADR

Mediation

Negotiation

Conciliation

Law of persons

Natural persons

Nationality, citizenship and domicile

Artificial person

Unincorporated associations

Incorporate associations

Co-operative societies Law of tort

Nature of tort

General defences of tort

Negligence

Vicarious liability

Strict Liability

Defamation

Limitation of actions

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Law of contract

Definition of contract

Classification of contracts

Essentials of a valid contract

Terms of a contract

Vitiating factors

Illegal contracts

Discharge of contract

Remedies for breach of a contract

Limitation of actions Sale of goods

Nature of the contract

Formalities of the contract

Terms of the contract

Implied terms by statute

Rights and duties of the parties

Auction sales

International contracts of sale: FAS, FOB, CIF, FCA, CPT, CIP, DAT, DAP, DDP, CFR, DAF, DDU, Ex-works and Ex-ship

Hire Purchase Contracts

Nature of the hire purchase contract

Difference between hire purchase and conditional sale/credit sale

Formalities of the hire purchase contract

Implied Terms of the hire purchase contract


Termination and completion of the hire purchase contract Agency

Meaning and nature of the agency contract

Types of agents

Creation of agency

Authority of an agent


Termination of agency

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Partnership

Nature of partnership

Types of partnerships

Rights, duties and liabilities of existing, incoming and minor partners

Management of partnerships.

Dissolution of partnerships and its consequences Indemnity and Guarantees

Nature of the contracts


Termination of the contract.

Remedies for breach of contract Insurance

Nature of the contract

Formalities of the contract

Principles of insurance

Types of insurance

Termination of the contract Negotiable Instruments

Nature and characteristics

Negotiability of the instrument

Types: cheques, promissory notes, bills of exchange

obligations of the parties The Law of Property

Definition of property

Classification of property (real and personal, movable and immovable, tangible and intangible)

Property in land: private, public and community land

Interests in land: estates, servitudes and encumbrances

Intellectual property: plant breeder’s patents, trademarks, copyrights and industrial designs

Emerging issues and trend

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SUBJECT NO.5 MANAGEMENT INFORMATION SYSTEMS GENERAL OBJECTIVE This subject is intended to equip the candidate with knowledge, skills and

attitudes that will enable him/her to apply information systems effectively in

solving business problems and decision making.

LEARNING OUTCOMES A candidate who passes this subject should be able to: (a) Investigate on existing technologies about software and hardware to solve

problems

(b) Display proficiency in decision making using contemporary Information systems tools

(c) Apply the principles of information systems development

(d) Use various information systems in an organisation

(e) Apply the knowledge of information systems for competitive advantage

(f) Use data communication networks, the Internet and e-commerce in optimising business opportunities

(g) Implement information systems’ governance and risk management principles in business

(h) Implement information systems legal, ethical and social issues INDICATIVE COURSE CONTENT

Introduction to information communication technology (ICT)

Overview of ICT

Introduction to computer systems

Computer hardware

Computer software

Programming languages and tools

Information systems personnel and hierarchy

Role of ICT in business environments

Information centres

Impact of ICT in business

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ICT governance

Corporate governance and ICT governance

Policies and procedures

ICT management practices

Monitoring of controls and risks

Impact on ICT compliance with professional standards and codes Systems development

General systems theory

Role of management in systems development

Systems development approaches

Systems development life cycle (SDLC)

Rapid Applications Development (RAD)

Systems development constraints Information systems in an enterprise

Overview of Information Systems

Components of an information system

Types and characteristics of information systems

Systems in a functional perspective

Enterprise applications and the business process integration

Management information systems resources Legal, ethical and social issues in management information systems

Management information systems ethical and social concerns

The moral dimension of management information systems

The legal issues in management information systems

Emerging issues and trends

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LEVEL II (SKILLS)

SUBJECT NO. 6 CREDIT MANAGEMENT-LENDING

GENERAL OBJECTIVE


attitudes required for the administration for credit in the financial sector.

LEARNING OUTCOMES:

A candidate who passes this subject should be able to: (a) Undertake credit administration duties and responsibilities in financial

institutions

(b) Align credit assessments in conformity to laid down policies, procedures and practices

(c) Assess the impact of lending in promoting business enterprises in the economy.

INDCATIVE COURSE CONTENT

Introduction to credit administration

Identifying the credit opportunity

The credit processes

Identifying the credit opportunity

Credit evaluation

Credit decision making

Credit monitoring

The credit analysis process

The five Cs of credit

The credit analysis path Securities

Definitions

Secured and unsecured debts

Features of a good security

Types of securities

Taking and perfection of securities

Documentation of securities

Lodging and discharging of securities

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Credit facilities

Introduction

Funded and non-funded securities

Management of overdrafts

Structuring of credit facilities (Loans and advances) Credit cards

Definitions (credit and debit cards)

Importance of credit cards

Parties to credit card transactions

Main features of credit cards

Types of credit cards

Assessment and appraisal of credit card applications

Managing credit cards’ fraud

Credit cards’ risk management

Delinquency management Asset finance and leasing

Overview of asset finance

Types of asset finance

Assessment and management of asset finance risks

Choosing the right type of asset finance

Definition of leasing

Types of lease

Merits and demerits of lease

The leasing processes

Assessment and appraisal of leasing applications

Marketing and leasing

Leasing risks management Hire Purchase

Overview of hire purchase

Formation of a hire purchase contract

Duties and rights of parties to a hire purchase contract

Termination of hire purchase contracts

Advertising for hire purchase

Hire purchase risk management

Types and products of mortgage

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Introduction to mortgage

Types of mortgages

Parties to a mortgage transaction

Products offered under mortgage

Target customers and mortgage financiers

Analysing mortgage application propositions

Types of documents and registration process

Risk management and recovery Microfinance institutions (MFIs)

Introduction to microfinance

Distinction between microfinance and microcredit

Formulation of policies and procedures

Recruitment and retention of clients

The process of savings and lending in MFI(s)

Loan portfolio management

Risk management in MFIs

Role of regulatory authorities in MFI(s) Cooperative societies

Types of cooperatives

Cooperative principles and practice of cooperatives

Products offered by cooperatives

Structures and management of cooperatives

The process of saving and lending in cooperatives

Risk management

Delinquency management

The future of cooperatives

Role of regulatory authorities Emerging issues and trends

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SUBJECT NO.7 BUSINESS ENVIRONMENT

GENERAL OBJECTIVE

This paper is intended to equip the candidates with knowledge and tool that

would enable him/her to appreciate the function of organisations, organisational

management, marketing and the external environment such as the economy and

markets

LEARNING OUTCOMES


(a) Describe different types of business organisation.

(b) Assess factors which prompt change in organisations. (c) Describe how management influences the operation of business

organisations.

(d) Identify factors which facilitate team working.

(e) Identify the marketing mix in different

(f) Explain the product life cycle.

(g) Describe how supply and demand affects business activity.

(h) Describe the business cycle.

(i) Identify government policies to manage the economy.

(j) Explain how government policies influence the business environment.

(k) Explain the role of market segmentation and its implication for new

product development and modification.


1. The economy

The Ghanaian economy

Nature of industry

Employment patterns and population trends in the Ghana

2. The organisation

Types of business organisation

Organisational objectives

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Stakeholders

Growth and development and change in organisation

PESTEL analysis

3. Organisational management

Management and leadership

Groups and teams within the organisation

Motivation and job satisfaction

Communication in organisations

Communication system

4. The market environment

Marketing management

Elements of marketing

The product life cycle

Promotion

Pricing strategies

5. The competitive environment

Market structures and behaviour

Costs and economies of scale

Supply, demand and pricing

Determination of exchange rates

Elasticity

Effects of government intervention and regulation

6. The macro-economic influences on the organisation

Circular flow of income

The business cycle and the multiplier

Economic growth

Inflation and deflation

Unemployment

Government economic policies and their effects

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SUBJECT NO. 8 EXPORT/INTERNATIONAL CREDIT

GENERAL OBJECTIVE



of export/international credit

LEARNING OUTCOMES

A candidate who subject this subject should be able to:

(e) Apply the principles of credit management within global business

environment

(f) Assess and control risk associated with credit provision in

export/international business

(g) Understand different documents and systems used for

export/international credit

(h) Perform debt collections in export/international business


Introduction

Working capital

Types and characteristics of customers sole traders, partnerships, limited companies

Relevant cultural differences of customers in the export/international market.

Financial advantages and disadvantages of granting credit to different types of customers.

Types of credit agreements.

Advantages and disadvantages of credit agreements to the credit supplier and the customer.

International Commercial Terms (INCOTERMS)

EXW Ex-Works

FAS – Free Alongside Ship

FOB– Free on Board -

CFR – Cost and Freight

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CIF – Cost insurance Freight

CIP Carriage and Insurance Paid

DDP – Delivered Duty Paid

Payment Terms and Methods

Payment in advanced

Bills of Exchange

Bills of Collection

Documentary credit

Documentary collection

Open account trading

Promissory note

Cheques

Banker’s draft

Bank transfer

SWIFT

International Money Oder

Bonds and guarantees

Export/International Transport Documents

Export Invoice

Bill of Lading

CRM

CIF

Airway /Seaway Bill

Certificate of origin

Credit Risk Control

Risk assessment and control

Information sources and their value

Scoring

Insurance

Collections Methods and Legal Action

Targets and use of resources

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Methods

Dealing with problems

Legal procedures and use of third parties

Money Laundering Regulations

SUBJECT NO.9 LAW GOVERNING CREDIT PRACTICE

GENERAL OBJECTIVE


attitudes that will enable him/her to apply principles of credit law in an

organisation.

LEARNING OUTCOMES


(a) Identify the securities available in lending

(b) Comply with the procedures and methods of creation of securities

(c) Identify the rights and duties of lenders and borrowers

(d) Demonstrate knowledge of Bankruptcy and Insolvency Law.


Introduction to securities

Meaning of a security

Types of securities

Advantages and disadvantages of collateral

Formation of the contract

Qualities of a good security

Enforcement and perfection of securities Land as security

Meaning of land

Land tenure: freehold and leasehold

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Advantages and disadvantages of land as security

Creation of charges and mortgages

Procedure for perfecting title to land as security

Rights and duties of the parties to a charge and mortgage

Remedies

Release of security Intellectual property as collateral

Meaning of intellectual property

Types of intellectual property

Procedures for perfecting a security interest in intellectual property

Advantages and disadvantages of using intellectual property as collateral.


Remedies

Discharge of security Chattel securities

Meaning of a chattel

Creation of chattel mortgages

Parties to a contract of chattel mortgage


Remedies

Discharge Guarantees and Indemnities

Meaning and characteristics

Formation


Common clauses in guarantee and indemnity

Termination of guarantees and indemnity

Advantages and disadvantages of guarantees and indemnities Bailment, pledge and lien


Formation, rights and duties of the parties

Remedies for breach, termination

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Corporate securities


Debentures

Charges

Remedies of a debenture holder

Shares and corporate bonds

Common clauses in corporate bonds Government borrowing

Treasury bills

Treasury bonds

Borrowing by County Government Regulatory Framework for lending institutions (excluding banks)

Co-operative societies

Savings and Loans companies

Micro finance institutions

Mobile money transfer services industry

Prudential Guidelines for lending Institutions Corporate governance

Meaning of corporate governance

Importance of corporate governance

Principles of corporate governance

Best practice in corporate governance

Role of Stakeholders (Shareholders, Board of Directors, Government)

Conflict of interest

Investor education and protection of shareholders

Consumer Protection in Credit Agreements

Credit card agreement

Disclosure

Unauthorised charges

Insurance

Correcting of errors

Deferral of payments

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Default charges

Prepayment Emerging issues and trends

SUBJECT NO. 10 PRINCIPLES OF ACCOUNTING GENERAL OBJECTIVE


attitudes that will enable him/her to prepare and interpret financial statements

for different entities.

LEARNING OUTCOMES


(a) Prepare books of original entry and basic ledger accounts under double

entry system

(b) Prepare basic financial statements of sole traders, partnerships, companies

and manufacturing entities and not for profit organisations

(c) Comply with the regulatory framework in the accounting field

(d) Account for assets and liabilities

(e) Analyse financial statements by use of ratios and statement of cash flows.


Accounting principles and techniques

• Reasons for keeping accounts

• Account, ledger and transaction types

• The accounting equation

• Rules of double entry, cash and credit transactions, VAT, and discounts

• Use of control accounts to ensure ledger accuracy.

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Trial balance and financial statements

• Trial balances as platform for financial statements.

• Error correction, undetected errors and suspense account.

• Statements: Income, Financial Position and Retained Earnings

Reconciliation.

• Adjustments to monetary values (incl. accrued/prepaid items,

depreciation, bad debts, allowance for doubtful debt)

• Concepts, conventions and accounting standards.

Differences in financial reporting

• Sole trader and micro, small, medium, and large company reporting.

• Regulatory/legal requirements (FRS/Ghana Companies Act)

• Company report content by management and auditors.

• Relative usefulness to credit managers.

Budgetary control

• Budgetary control process.

• Different budget types

• Cash budgets and relevance

• Variance analysis

Business performance

Working capital

Cash operating cycle

Ratio calculation and meaning

Business performance measurement

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SUBJECT NO. 11 TRADE CREDIT MANAGEMENT

GENERAL OBJECTIVE



of trade credit environment.

LEARNING OUTCOMES


(a) Apply the principles of credit management within business environment

(b) Assess and control risk associated with the provision of trade credit by

selecting appropriate payment terms and methods of payment.

(c) Understand different documents and systems used for trade credit

(d) Apply collection and recovery methods and strategies

(e) Draft a credit policy and procedural manual.

(f) Measures credit management performance and sets targets in an

organisation.

Introduction to trade credit

Definition of credit

Cost of credit

The credit department

Credit policy

Financial advantages and disadvantages of granting credit to different types of customers.

Credit Agreement and Payment Terms

Credit Sale

Hire Purchase

Conditional sale agreement

Letters of credit

Promissory note

Cheques

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Banker’s draft

Bank transfer

Bank guarantees

Credit risk control

Risk assessment and control

Information sources and their value

Scoring

Insurance Sales Ledger Administration

Importance and interpretation of sales ledger

Administration of sales ledger

Sales ledger format

Statements

Accounts queries

Order vetting

Sales ledger control

Collections methods and legal action

Targets and use of resources

Methods

Dealing with problems

Legal procedures and use of third parties

Money Laundering Regulations

PAPER NO.9 ADVANCED CORPORATE LENDING

GENERAL OBJECTIVE


attitude that will enable him/her to manage the lending function

LEARNING OUTCOMES

A candidate who subject this paper should be able to:

Assess the creditworthiness of corporate customers

Identify various risks associated with collateral

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Assess and manage credit risk

Apply canons of lending in evaluating corporate customers

Monitor and control lending

Comply with professional ethics applicable in corporate lending


An overview of corporate lending & a framework for business strategy and

financial analysis

Review and analysis of principal corporate lending criteria

Analysis of risks associated with specific types of organisation

Evaluation of supply chain operations and impact on operational cash-

flow needs

Analysis of business strategy and its relationship with finance

Advanced application of practical tools application including analysis

of earnings quality, earnings management and free cash-flow analysis

Evaluation of how financial statement information captures and reflects

the critical success factors of risk in the competitive environment and

strategy of firms

Financial risk and cash-flow drivers

The importance of cash-flow measurement and the flaws of using

traditional accounting performance measures

The nature of ‘free cash flow’, the principal cash-flow drivers, and the

relationship with value creation

Using ratios as a working tool and setting guidelines for key ratios

Understanding cash flow and what it reveals

Calculating free cash flow and its relevance

The importance of positive working capital and the trading cycle

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Shareholder value and valuation/ debt structure and capacity

the development of ‘shareholder value’

Techniques of company valuation

Valuations using various traditional methods

Valuation as a tool for credit analysis and its relevance

Analysis of capital structure, the debt versus equity debate and the

nature of the ‘cost of capital’

Application and evaluation of alternative approaches to assessing

payback through reliability and quality of earnings, earnings

generation, repayment capability and the underlying risks for lending

bankers

Critique and evaluation of techniques with respect to empirical

evidence

Analysis of risk exposures

This section identifies and analyses the nature of the underlying risks

associated with corporate relations and alternative lending propositions.

The relative importance and propensity of these risk (both financial and

financial) are examined in light of empirical evidence. Such risks include:

credit risks, operational risks, financial risks, market risks, reputational

risks, regulatory and environmental risks

Structuring and Presentation of Facilities/ Monitoring and Assessing

Analysis the need for finance

Development and justification of suitable alternatives involving

different terms and products (including cash flow lending, venture

capital/equity-types funding etc.)

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Evaluation of alternative finance solutions and alignment of risk/return

models

Portfolio management, reviews and analysis

Internal inspections and reviews –managing the process

Understanding and appreciating the different types of security

Warning signs and how to manage them

Documentation

Discuss documentation considerations to align with facility structure

and underlying risks

Managing documentation issues, covenants, both financial and non-

financial, and reporting requirements with reference to industry

differences

The assessment of collateral and calculating a range of their recovery

prospects to evaluate suitable security options

Prudential guidelines in lending

Introduction

Reasons for prudential guidelines

Non-performing loans

Non-performing overdraft

Risk classification of debt

Management of non-performing debts

Provisioning requirements

Renegotiated standard loans

Multiple facilities

Renegotiated doubtful loans

Write offs

Treatments of securities

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Insider borrowing

Credit crunch

Definition of credit crunch

Causes of credit crunch

Effects to the business environment and the economy

Managing risk under credit crunch

Ethics in corporate lending

Standards of conduct and personal integrity

PAPER NO.13 ADVANCED CORPORATE LENDING

GOVERNANCE, RISK AND ETHICS

GENERAL OBJECTIVE


attitudes that will enable him/her to exercise professional judgement in carrying

out the role of the credit manager relating to governance, internal control,

compliance and the management of risk within an organisation, in the context of

an overall ethical framework.

LEARNING OUTCOMES


Define governance and explain its function in the effective management

and control of organisations and of the resources for which they are

accountable

Evaluate the Professional Accountant’s role in internal control, review and

compliance

Explain the role of the accountant in identifying and assessing risk

Explain and evaluate the role of the accountant in controlling and

mitigating risk

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Demonstrate the application of professional values and judgement through

an ethical framework that is in the best interests of society and the

profession, in compliance with relevant professional codes, laws and

regulations.


Governance and responsibility

The scope of governance

Agency relationships and theories

The board of directors

Board committees

Directors’ remuneration

Different approaches to corporate governance

Corporate governance and corporate social responsibility

Governance: reporting and disclosure

Public sector governance

Internal control and review

Management control systems in corporate governance

Internal control, audit and compliance in corporate governance

Internal control and reporting

Management information in audit and internal control

Identifying and assessing risk

Risk and the risk management process

Categories of risk

Identification, assessment and measurement of risk

Controlling risk

Targeting and monitoring risk

Methods of controlling and reducing risk

Risk avoidance, retention and modelling

Professional values, ethics and social responsibility

Ethical theories

Different approaches to ethics and social responsibility

Professions and the public interest

Professional practice and codes of ethics

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Conflicts of interest and the consequences of unethical behaviour

Ethical characteristics of professionalism

Social and environmental issues in the conduct of business and of ethical

behaviour

SUBJECT NO.14 PROCESS IMPROVEMENT

GENERAL OBJECTIVE

This subject is intended to equip the candidate with advanced knowledge, skill

and attitude that will enable him/her to monitor, review and improve business

processes in own area of responsibility

LEARNING OUTCOMES


Use appropriate measures to monitor and assess business processes in

own area of responsibility.

Work with relevant stakeholders to monitor how business processes

affect the quality of work in the department.

Devise a plan for suggested improvements in response to the business

process monitoring undertaken.

Use appropriate measures to check the validity of the plan of

improvement.

Take corrective action and revise plans where necessary.

Prepare a business plan for the implementation of proposed process

improvements.

Develop measures to test the impact of the change to business processes.

INDICATIVE CONTENT

Benefits and potential difficulties associated with business process

management

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Lean Six Sigma, Streamlined Process Improvement (SPI) and Continuous

Improvement

methodologies

Use of tools and techniques to identify areas for improvement including

value stream

Mapping, statistical process control and the DMAIC problem solving

process.

Critical business processes and preliminary boundaries

Creation of process improvement team and project plan including

reporting

Mapping and documenting current business processes including

employee observations

and process walk-through

Cost, cycle time and output analysis

Remove non-value-adding process steps through leaning, cleaning and

greening

Selecting best-value future-state solutions

Validation and verification of changed process.

In-process measurement and feedback systems

Implementation plans including change effect measurements and

continuous

improvement, with consideration of the implementation, review and

communication of

strategy

SWOT construction and analysis.

SUBJECT NO. 15 DEBT RECOVERY PROCEDURE AND PRACTICE

GENERAL OBJECTIVE

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This paper is intended to equip the candidate with the knowledge, skills and

attitudes that will enable him/her to undertake debt recovery procedures in

accordance with the law.

LEARNING OUTCOMES


Evaluate the viability of recovering debts through legal proceedings

Comply with the procedures for recovery of debts through legal

proceeding

Analyse the alternative models of debt recovery

Apply knowledge of insolvency law in an international perspective.


Debt and borrowing

Meaning of debt

Types of debt

Importance of borrowing

Debt instruments

Creditors and debtors’ rights

Debt collection options

Debt protection

Meaning of debt protection

Alternatives to debt protection

Debt protection insurance

Distinction between debt protection insurance and credit insurance

Debt management

Meaning of debt management

Types of debt management

Rescheduling debt

Extension of time

Foreclosure

Conversion of debt to equity

Payment of interest first

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Suspended payments

Surrender of securities

Receivership

Preliminary considerations before initiating or defending debt

Recovery suits

Letters of demand

Capacity to sue

Mediation

Acknowledgement of debt

Evidence of indebtness

Statute barred debts

Viability of debt recovery

Availability of the debtor

Enforcement and execution

Debt recovery through legal suits Institution of suit

Locus standi

Jurisdiction

Pleadings

Service of summons Hearings

Summary judgment

Attachment before judgment

Presentation of evidence

Judgement and decree

Extraction of decree

Execution of decree

Attachment and sale of property

Attachment of debts

Garnishee orders

Alternative dispute resolution mechanisms

Negotiation

Conciliation

Meditation

Arbitration

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Bankruptcy

Meaning

Nature of bankruptcy

Alternatives to bankruptcy

Bankruptcy proceedings

Rights of creditors

Consequences of bankruptcy

Discharge of a bankrupt

Dissolution of partnership

Break-up of a partnership

Effects of break-up

Restriction of ceasing to be a partner on or after break-up

Protection of property acquired after break-up

Winding up by partners

Distribution of partners assets on winding up

Dissolution of a partnership which has broken up

Power of court to appoint administrator

Order appointing provisional liquidator

Power of court to fix remuneration of receivers and managers

Appointment of a receiver as liquidator

Provisions relating to receiver or manager appointed

Insolvency law

Meaning of insolvency

Receivership

Types of liquidation

Official receiver/liquidator

Committee inspection

Distribution of assets

United Nations Commission on International Trade Law (UNCITRAL) legislative guide on insolvency law

United Nations Commission on International Trade Law (UNCITRAL) model law on cross border insolvency

World Bank principles and guidelines for effective insolvency and creditors rights system.

Emerging issues and trends

SUBJECT NO.16 CREDIT PRACTICE

GENERAL OBJECTIVE

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This paper is intended to equip the candidate with the knowledge, skills and

attitudes required for the application of various credit management concepts in

a practical scenario.

LEARNING OUTCOMES


Demonstrate sound technical knowledge in credit management

Demonstrate diverse knowledge clearly applied in an analytical and

practical manner in solving the problems in a case study

Present appropriate alternate solutions in credit management and make

effective judgement in a logical and rational manner

Communicate effectively with realistic recommendations in a concise and

logical manner

Prepare a comprehensive credit report.


Credit portfolio risk management

Definition of credit portfolio risk management

Pre and post credit disbursement risks

Measuring credit portfolio risk

Credit risk models

Credit enhancement methods

Credit portfolio segmentation and risk diversification

Identifying concentrations of risk

Evaluating and managing concentrations of risk

Concentration management techniques

Illustrative case studies on credit portfolio risk management

Regulatory requirements: minimum capital requirements

Basel capital adequacy framework for credit risk

Impact of changes to the Basel Capital Adequacy framework on credit risk

Key differences between regulatory capital (Under Basel framework) and economic capital

Uses of economic capital and economic value-added concepts in a bank

Relationship between shareholder, regulatory and economic capital

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Corporate failure and financial distress

Definition of financial distress

Indicators and early warning signs of corporate failure

Reasons of corporate failure

Use of statistical models in predicting corporate failure

Comparison of corporate failure prediction models

Strategies of Mitigating against Financial Distress and Corporate failure

Illustrative case studies on corporate failure and financial distress Working capital and credit management

Relationship between working capital cycle and credit management

Effects of credit terms on working capital management

Impact of credit policy on working capital management

Determination of working capital

Strategies of improving working capital

Illustrative case studies on working capital and credit management Delinquency management

Introduction to delinquency management

Causes of delinquency management

Delinquency classification

Effects of delinquency in credit portfolio

Work outs and restructuring

Negotiation and influencing

Dealing with problem loan accounts: nature of problems and

immediate action drill

Illustrative case studies on delinquency management Accounts receivables management information systems (MIS)

Case study on automation of receivables management function Case studies on:

Microfinance

Cooperatives

SME lending

Trade and export credit management

Credit policy

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Emerging Issues and trends

GENERAL GUIDELINES TRAINING

Students are required to participate in the training organize by the Institute.

ENTRY REQUIREMENT

The minimum qualification for admission to the Professional Certification

Programme is university degree or diploma from a tertiary institution.

Non-Credit Management, Banking & Finance degree students shall begin at

Level 1. Students shall have to clear all Level I & II papers through examination

or exemption before they can sit the examination for any Level III paper.

Students shall pass all subjects in the examination at one level before they can

proceed to write the examination at the next higher level.

EXEMPTION

A pass in any level I and II subjects in a university degree examination or its

equivalent by a recognised institution may qualify a candidate for exemption

from that subject.

An applicant with a B.Sc. (Administration) Credit Management/Banking &

Finance, Option or an MBA (Risk & Finance) or their equivalents may qualify for

exemption from level I and part of level II. Students who wish to be considered

shall apply for all exemptions sought for in levels I and part of II. Transcripts and

other supporting documents should be attached at the time of submitting

admission forms. No exemption at the Level III.

AWARDS

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A student who successfully completes all level II papers shall be awarded an

Associate membership certificate at a graduation ceremony and designated as

Chartered Credit Professional of the Institute.

EXAMINATION PERIOD

Examinations are held in January, June and November. There is no order for

selection of courses for examination registration; however, candidates are

expected to complete one level before proceeding to the next. Exams registration

opens in March for June diet, August for November diet and September for

January diet.

Pass Mark

Levels I, II and III

The pass mark for a Level I, II or Level III paper is an aggregate of Fifty percent

(50%) and the Professional Certification Board has satisfied itself that he/ she has

attained the required 3 years working experience in the Credit management and

its related field.

PROFESSIONAL CERTIFICATION BOARD

The Professional Certification Board (PCB) oversees the professional certification

programme.

The functions of the Board:

Reviews syllabuses to meet changing or current trends in HRM.

Approves resource persons for teaching course subjects.

Reviews examination questions submitted by lecturers.

Oversees the conduct, marking, and publication of examination results.

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Sets qualifications/criteria for studentship.

Approves applications for exemptions.

Vets course handouts against defined criteria

Considers appeals and complaints about examination results

Reviews and recommend action on examiners’ reports.

Submits periodic reports to the Council.

For more information and inquiries:

www.cicmgh.org

[email protected] / [email protected]

(00233) 0302951768/0244045254

http://www.cicmgh.org/

mailto:[email protected]

mailto:[email protected]