Credit Appraisal Techniques for Lending Institutions Training| Kenya

ECourse Overview

Evaluating borrower creditworthiness is a vital skill for credit officers and finance staff. This training provides hands-on knowledge to minimize defaults and maintain institutional stability. Participants gain expertise in both personal and business loan evaluation.

Moreover, the course focuses on financial analysis, borrower behavior, and regulatory compliance. Effective credit appraisal improves loan quality and protects portfolios from risk. By the end, attendees will have the confidence to make sound lending decisions backed by data.

Course Objectives

Participants will be able to:

Understand the goals and process of credit appraisal.
Use qualitative and quantitative tools to assess risk.
Analyze financial documents like cash flow statements.
Apply the 5 Cs of credit with confidence.
Recommend suitable loan terms and amounts.
Prepare clear and well-supported appraisal reports.

Course Modules

Module 1: Introduction to Credit Appraisal
Explore the meaning and importance of credit appraisal. Learn the roles of credit committees, approval workflows, and key legal considerations, including SASRA regulations.

Module 2: Understanding the 5 Cs of Credit
Evaluate borrower risk using these five pillars: Character, Capacity, Capital, Collateral, and Conditions. Each component helps determine reliability and repayment ability.

Module 3: Financial Document Analysis
Gain practical skills in reading income statements, balance sheets, and cash flow reports. You’ll use ratios to assess liquidity, solvency, and profitability.

Module 4: Credit Scoring & Risk Models
Differentiate between qualitative and quantitative scoring systems. Discover how SACCOs grade risk and assess the creditworthiness of both individuals and SMEs.

Module 5: Loan Structuring & Documentation
Design appropriate loan amounts, interest rates, and repayment periods. Understand security documents, guarantors, covenants, and legal disbursement conditions.

Module 6: Writing Credit Appraisal Reports
Structure a professional credit appraisal report. Learn to justify recommendations, present borrower profiles, and attach proper supporting documents.

Module 7: Spotting Red Flags Early
Identify signs of borrower distress. Avoid over-lending and use early warning systems to protect your loan book.

Module 8: Case Studies & Practical Exercises
Work on real-world loan applications. Participate in group evaluations, write sample reports, and receive peer feedback.