Course Outline

Module 1

  • Analysis of Personal Lending propositions
    • What information must customers provide to us?
    • What extra information should customers provide to us?
    • How do we analyse that information to check its authenticity?
  • CAMPARI as a mnemonic for analysing Personal Lending propositions
    • Character: what do we know of the customer – for instance their track record with the bank and previous loan history
    • Ability: where are the repayments coming from – what “spare” cash does the customer have to finance loan repayment?
    • Margin: what is the correct interest rate for the lending – this is the “rent” that we are asking the customer to pay for our money and will reflect the appropriate degree of risk
    • Purpose: why does the customer want the loan – are they buying / financing a purchase that is acceptable to the bank and is the repayment period appropriate for this type of purchase?
    • Amount: how much does the customer want to borrow – are they contributing anything to the purchase prices or is the bank being asking to lend 100%?
    • Repayment: what is the repayment schedule – will the customer be able to maintain these payments for the duration of the loan?
    • Insurance: what security (collateral) would we expect to be offered – how easy will it be to prefect this security giving the bank the “Insurance” it wants?

Module 2

Interaction between Lender and Customer

  • Understanding behaviours
    • How is our behaviour developed by previous interactions (both inside and outside the bank)?
    • How is our customer’s behaviour also developed by many interactions
    • How can we ensure that we understand customers’ behaviours and, just as importantly, they understand ours…?
  • Effective Communication
    • What do we mean by Effective Communication?
    • How is Effective Communication affected by first impressions?
    • How is Effective Communication affected by different modes of communication: face-to-face / audio / e-mail / etc.?
  • Building (and maintaining) rapport
    • Understanding Emotional Intelligence in building (and retaining) rapport with customers – and, coincidentally, with colleagues…
    • Using Goleman’s 5 steps to Emotional Intelligence in customer interactions
      • Self-Awareness
      • Self-Management
      • Motivation
      • Empathy
      • Social Skills
    • The levels of rapport – and how we achieve them
    • The Berne model of communication – and its link to rapport
  • Interview techniques
    • Getting the right information
    • Checking the accuracy of that information in discussions
    • Challenging ambiguities (or information that seems to be incorrect)
    • Asking for alternatives / Offering alternatives
    • Effective Listening techniques

Module 3

  • Making the decision
    • How do we arrive at the correct decision?
    • Balancing “pros” and “cons”
    • Re-analysing the CAMPARI information then…
  • Structuring the lending
    • Setting up the loan to meet the optimal “shape” of the loan:
      • Optimal to the bank
      • Optimal to the customer
    • Creating the appropriate documents and getting them signed before advancing the money…
  • Insurance
    • What security does the bank think is appropriate for this lending?
    • Is the bank prepared to lend unsecured?
      • Why not…?
    • What security does the customer have to offer?
    • How does the bank perfect the security to ensure that it is adequately protected in the event of default?
  • …and Getting Repaid!
    • Setting up the appropriate monitoring process for the loan to ensure that repayment is always (as near as possible) on schedule
    • What actions do we need to take if the repayment deviate from the agreed schedule
      • At what stage do we start to worry…?

Module 4

  • Monitoring the Lending Portfolio
    • What regular monitoring processes should the bank have in place across the entire Lending Portfolio?
    • What are the early-warning signs that the bank should be looking for?
    • At what stage do these early-warning signs actually mean that the loan (loans!) are out-of-order?
  • Customer Interactions (revisited)
    • How does the bank communicate with the customer now that the lending is not performing as agreed (and expected!)?
    • How must that communication process change from the initial communication when the loan was being discussed?
    • Revised Interview Techniques
  • Negotiation Skills
    • What are the steps required to “negotiate” with the customer to get the best possible solution – both for the customer and for the bank…?
    • Understanding the IVCs (Inexpensive Valuable Concessions) and WAPs (Walk Away Positions) available to the bank in arriving at an agreement

Module 5

  • Bad and Doubtful Debts
    • How does the bank decide that a loan is now “Bad”?
    • What are the steps required now in trying to achieve repayment?
    • What has changed now with information in the original CAMPARI assessment?
    • What is the current CAMPARI assessment?
      • How can the bank learn from previous assessments which, with the benefit of hindsight, turn out to have been incorrect?
    • How should the bank re-schedule the loan agreement?
    • When should the bank begin to realise its security?
    • What legal recourse does the bank have in “forcing” the customer to repay…?

(Optional) Module 6

The course can also include the analysis and decision-making for small-business lending – for sole traders, partnerships and unincorporated entities

  • Including the assessment of the more-traditional sources of financial information through Balance Sheets, Profit & Loss Accounts, and Financial Forecasts
 21 Hours

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