Corporate lending – KASNEB Syllabus



This paper is intended to equip the candidate with the knowledge, skills and attitudes required for management of the corporate lending function.


A candidate who passes this paper should be able to:

  • Assess the creditworthiness of corporate customers
  • Identify various risks associated with collateral
  • 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


Types of corporate customers

  • Companies and groups of companies
  • Multinational companies
  • Partnerships
  • Registered groups
  • Trusts
  • Not-for-profit organisations
  • Parastatals and governments agencies
  • County governments
  • NGOs

Corporate strategy and lending

  • Analytical models
  • Analysis of corporate strategy in relation to lending
    • Financial strategy
    • Business strategy
    • Corporate goals
    • Competitive environment
    • Strategic alternatives

Canons of lending

  • Principles of good lending
  • Attributes of good lending
  • Approaches to assessing the viability of a lending proposition
  • Borrowing requirements
  • Credit risks associated with various types of customers
  • Special considerations when lending to registered groups
  • Special considerations when lending to SMEs
  • Terms and conditions of lending
  • Lending requirements
  • Ethics in corporate lending

Managing credit risk in lending

  • Risk posed by different types of corporate customers
  • Credit scoring and credit rating
  • Identification of interest and exchange rate risk posed by corporate customers
  • Techniques for managing risk – internal and external techniques

Financial statements analysis

  • Trends in financial statements
  • Projected profit and loss accounts
  • Ratio analysis
  • Cash flows analysis
  • Budgets analysis
  • Linking financial analysis to lending propositions
  • Limitations of financial analysis in credit assessment

Principles of collateral management

  • Introduction
  • Types of collateral
  • Qualities of good collateral
  • Merits and demerits of collateral
  • Periodic valuation and monitoring of collateral
  • Perfection processes and lodging of collateral
  • Qualitative and quantitative collateral evaluation
  • Collateral review

Monitoring and control of lending

  • Reviewing customers’ accounts
  • Sources of information for review
  • ‘Out of order’ report
  • Warning signs of bad and doubtful debts
  • Overtrading – emphasis on link to cash flow
  • Control measures in lending
  • Interim management accounting information
  • Credit reporting mechanisms

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 substandard loans
  • Multiple facilities
  • Renegotiated doubtful loans
  • Write offs
  • Treatment of securities
  • Insider borrowing

Alternative sources of finance

  • Introduction
  • Equity finance
  • Corporate bonds
  • Franchising
  • Leasing
  • Syndication of credit facilities

Credit crunch

  • Definition of credit crunch
  • Causes of credit crunch
  • Effects to the business environment and the economy
  • Managing risk under credit crunch

Emerging issues and trends

Leave a Reply

Your email address will not be published. Required fields are marked *