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Non-Performing Loan (NPL) Management Training for IFC

Credit Risk, GBRW Consulting, GBRW Group, GBRW Learning, Problem Loan Management, Risk Management

GBRW designed, developed and delivered a suite of courses focused on the management of problem loans for the International Finance Corporation (IFC).

The curriculum was split into two courses. The first was a one-day Executive Forum for executives and senior management of FIs responsible for Corporate, SME and Retailing business units, as well as senior management of Stressed Asset Management Units. The second course was a three-day Problem Loan Management Workshop, for senior operational staff responsible for detecting, assessing, monitoring, managing and resolving problem loans.
The programme outline was as follows:

- Day One: Terms and concepts; including problem loan causes, early warning indicators, as well as account and portfolio administration.

- Day Two: Analysis of borrower’s management, financials and cash flow and the decision-making process.

- Day Three: Formulating workout strategies and tools for rescheduling and restructuring problem loans.

The workshop included case studies and group exercises. Delegates were asked to perform tasks as an individual and a member of the team. In order to make the most effective use of time they were asked to complete the assignments contained in an attached, “Our Market, Ltd. Financial Statement and Cash Flow Analysis Case Study Exercise “. Completing the assignments involved:

- Assessing a company’s financial performance;

- Constructing a Cash Flow (Direct) Statement; and

- Assessing a company’s cash flow, including the company’s financing needs and ability to service debt.

Whilst the training itself is compliant with international standards, each course was customised to take account of the prevailing legislation, regulation and banking practice which vary from country to country. Each course included complete guides for both instructor and delegates, as well as the case study materials.

Deliverables included:

Development and delivery of a series of courses which helped participants to:

- Understand and discuss how problem loans impact a lending institution’s operations, soundness and reputation;

- Be able to effectively define problem loans in a manner that will facilitate early detection and resolution;

- Understand and discuss the objectives or goals of managing problem loans;

- Classify problem loan causes in a manner that facilitate prioritizing mitigation strategies;

- Understand and discuss warning signs that help credit professionals foresee emerging loan problems;

- Understand and discuss methodologies for developing a plan to enhance the bank’s position;

- Understand and apply techniques to assess a distressed company’s financial condition, performance and ability to service debt; and

- Be aware of various approaches to resolve problem loans.