Professional Diploma in SME Credit

Why Professional Diploma in SME Credit?

 

The Professional Diploma in SME Credit is offered by LIA’s academic education partner the Institute of Banking which is a recognised college of UCD. This course was created for anyone operating in an SME lending capacity and has been revised for this coming semester with two new specialist modules. Students will gain essential credit risk assessment knowledge to support them in making informed and prudent decisions in response to SME applications for finance. One of the key learning outcomes of the Diploma is that students will become skilled in assessing and structuring SME credit proposals.

Programme Structure

 

The Professional Diploma in SME Credit consists of two pre-requisite modules*, SME Credit Risk Assessment and Principles of Credit Risk, and one specialist module to be chosen from SME Property Credit Assessment and Financing, SME Agri Credit Assessment and Financing, or SME Financing and Distressed Credit Analysis . All modules will be examinable by a mix of continuous assessment and written, essay style questions.

Those who successfully complete this programme will be awarded the Professional Diploma in SME Credit by UCD. This is a level 8 qualification on the National Framework of Qualifications (NFQ) and carries 25 ECTS (European Credit Transfer and Accumulation System) credits.

Course Aims

After successfully completing the Professional Diploma in SME Credit you will be able to:

  • the main features and characteristics of SMEs in Ireland
  • describe the key funding sources available to SMEs
  • assess the credit worthiness of SME borrowers
  • evaluate the commercial viability and sustainability of the SME business plans and management’s ability to deliver the plan
  • understand the capital, funding and liquidity costs for the bank in relation to lending;
  • structure a lending proposal in a manner which meets the needs of the SME borrower and complies with credit policies
  • understand the different types of credit monitoring controls
  • identify the early signs of credit deterioration, evaluate their potential impact and consider courses of action
  • understand the principles in relation to impairment provisioning
  • explain the data requirements, the importance of data accuracy and record keeping in supporting credit portfolio management credit models and grading;
  • effectively manage the client-bank relationship through the life of the credit facility to support the customer and protect the bank.


Entry Requirements

Individuals seeking admission to the Professional Diploma in SME Credit will:

  • have three years’ experience (full time) in a relevant Banking role and have completed the Professional Diploma in Financial Advice or equivalent 30 ECTS Special Purpose Award/s at Level 7, or
  • have an Honours degree (min. H2.2, Level 8 NFQ). Admission will also be considered from experienced professionals who do not meet the minimum admission requirements as set out above, who can demonstrate learning based on work and training experience e.g. Individuals employed in a Credit role with responsibility for Credit decisions in Financial Services.


Course Modules

Principles of Credit Risk

€475
  • What is credit risk?
  • Why is credit risk so important?
  • What are the other key categories of risks that banks are exposed to?
  • Bank Risk Appetite Framework
  • Basel Principles for the Management of Credit Risk
  • Components of the Credit Risk Management Framework
  • Credit portfolio management and credit concentration risk
  • Credit culture
  • Credit Risk Appetite Statement
  • The end to end credit process
  • Overview of the Canons Of Lending
  • Credit application process
  • Bank capital
  • Risk weighted assets
  • Basel II & Basel III, Minimum Regulatory Requirements
  • Introduction to Credit Models
  • Impairment provisioning
  • Stress testing
  • Impairments and capital
  • Pricing for Risk
  • Key Lessons from Irish banking crises, Honohan Report, Regling & Watson, Nyberg
 

Examinations

  • Combination of continuous assessment (multiple choice questions) and written, essay-style questions
  • Two-hour exam at the end of the semester
  • The pass mark is 40% in line with UCD academic policy

SME Credit Risk Assessment

€495
  • Objectives and challenges of SME lending
  • Characteristics of business entities
  • The main aspects of lending; Business strategy, Industry, Economic and Management team risk assessment
  • Characteristics of the different SME sectors
  • Primary Statements in financial reporting
  • Analysing financial information - P&L, balance sheet and cash flows
  • Calculating and analysing repayment capacity
  • Preparation of cash flow statements
  • Understanding working capital analysis
  • Conducting a financial projections sensitivity analysis
  • Different types of security and legal issues affecting security
  • Explaining covenants and conditions precedent

Examinations

  • Combination of continuous assessment (multiple choice questions) and written, essay-style questions
  • Three-hour exam at the end of the semester
  • The pass mark is 40% in line with UCD academic policy

SME Property Credit Assessment and Financing

€495
Some key practical SME credit assessment areas include:
  •  Advanced  Financial  Analysis:  We look at more financial ratios and review the debt levels  looking to see what they are telling the lender about the short term and longer term prospects for the SME trading business – More in depth SME Sustainability Analysis.
  • Advanced Analysis  on “reading between the lines “of  SME trading accounts:  Particular emphasis on identifying the signs that the financial accounts are tuned up to show a better financial position than the actual financial positon or tuned down to show a poorer financial position.
  • Preparation of a Cash Flow  Statement: we get them to build a cash flow statement as a way of ensuring they fully understand cash v profit, the key drivers of cash generation in SME’s and how the lender can assess the credit risk better by using cash flow analysis.
  • Advanced Sensitivity analysis: Reviewing the figures to look at the credit risk issues that can arise if things change and how to plan for this in a lending sanction. This is very important in cash flow lending.
  • Advanced Working Capital Management: We look more deeply into the management of working capital, particularly the dynamic nature of working capital and how a lender will need to look at the financing options to allow an SME manage working capital peaks that arise with growth.
  • Qualitative Factors- We bring them on to spotting the qualitative factors that will enable an SME to grow or signal that it is going to decline. This is a key skill for a cash flow lender as they need to spot these signs and react before events over take them and they have a poor quality credit.
  • New Irish SME Case Studies.

Examinations

  • Combination of continuous assessment (multiple choice questions) and written, essay-style questions
  • Three-hour exam at the end of the semester
  • The pass mark is 40% in line with UCD academic policy

SME Agri Credit Assessment and Financing

€495
Some key practical SME credit assessment areas include:
  •  Advanced  Financial  Analysis:  We look at more financial ratios and review the debt levels  looking to see what they are telling the lender about the short term and longer term prospects for the SME trading business – More in depth SME Sustainability Analysis.
  • Advanced Analysis  on “reading between the lines “of  SME trading accounts:  Particular emphasis on identifying the signs that the financial accounts are tuned up to show a better financial position than the actual financial positon or tuned down to show a poorer financial position.
  • Preparation of a Cash Flow  Statement: we get them to build a cash flow statement as a way of ensuring they fully understand cash v profit, the key drivers of cash generation in SME’s and how the lender can assess the credit risk better by using cash flow analysis.
  • Advanced Sensitivity analysis: Reviewing the figures to look at the credit risk issues that can arise if things change and how to plan for this in a lending sanction. This is very important in cash flow lending.
  • Advanced Working Capital Management: We look more deeply into the management of working capital, particularly the dynamic nature of working capital and how a lender will need to look at the financing options to allow an SME manage working capital peaks that arise with growth.
  • Qualitative Factors- We bring them on to spotting the qualitative factors that will enable an SME to grow or signal that it is going to decline. This is a key skill for a cash flow lender as they need to spot these signs and react before events over take them and they have a poor quality credit.
  • New Irish SME Case Studies.

Examinations

  • Combination of continuous assessment (multiple choice questions) and written, essay-style questions
  • Three-hour exam at the end of the semester
  • The pass mark is 40% in line with UCD academic policy

SME Financing and Distressed Credit Analysis

€495
  • Traditional banking facilities for SME borrowers
  • Alternative sources of finance for SMEs
  • Start-up business lending
  • Agricultural lending
  • Property lending
  • Conducting the borrower loan interview
  • Writing the credit application
  • Negotiating final terms and conditions
  • Legal documentation and drawdown
  • Procedures for deciding on impairment provisions
  • Monitoring and control framework
  • Identifying and reviewing a potentially distressed customer
  • Negotiating with customers in difficulty
  • Managing arrears and restructuring
  • Cancelling facilities, collections and recoveries
  • Loan restructuring options
  • Importance of the facility letter in impairment cases

Examinations

  • Combination of continuous assessment (multiple choice questions) and written, essay-style questions
  • Three-hour exam at the end of the semester
  • The pass mark is 40% in line with UCD academic policy