Fundamentals of Credit Management – KASNEB Syllabus



This paper is intended to equip the candidate with knowledge, skills and attitudes required to apply the basic principles of credit management in business.


A candidate who passes this paper should be able to:

  • Have a general understanding of credit business
  • Apply the basic principles of credit management in a business environment
  • Analyse the effects of cost of granting credit to a business
  • Provide basic advice on various aspects of credit management
  • Perform basic debt collection


Introduction to credit

  • Definition of credit
  • History of credit
  • Reason for and benefits of extending credit
  • Effect of credit to a business
  • Major categories of credit (such as consumer, trade and export)

Types of credit customers

  • Individuals
  • Sole traders
  • Partnerships
  • Limited companies
  • Government bodies
  • Unincorporated associations
  • Trusts/ Foundations/NGOs

Credit management function

  • Structure and organisation of the credit department
  • Roles of a credit department
  • Role of a credit officer
  • Qualities of a credit officer
  • Promoting Interdepartmental relationships (sales and marketing; accounts and finance; risk and internal audit; procurement; operations)

Cost of granting credit

  • Definition of cost of credit
  • Types of cost of credit
  • Component of total cost of credit: from a bank’s perspective
  • Determination of cost of credit
  • Effects of credit on profits, cash flow and liquidity

Overview of credit agreements/products

  • Hire purchase
  • Credit sale
  • Conditional sale
  • Optional account
  • Factoring
  • LPO financing
  • Invoice discounting
  • Charge account
  • Budget account
  • Personal loan
  • Mortgage
  • Rental agreement
  • Leasing

Documents, records and reports

  • Credit application form
  • Customer files
  • LPOs/LSOs
  • Sales order
  • Invoice
  • Delivery notes
  • Credit note
  • Debit note
  • Statements of account
  • Query records
  • Aged analysis
  • Telephone call records

Payment terms

  • Monthly account
  • Net days’ terms (7, 15, 30, others)
  • Stage payments
  • Load overload
  • Contra accounts
  • Cash with order
  • Cash on delivery
  • Journey terms
  • Settlement discounts

Payment methods

  • Cash
  • Cheques
  • Banker’s cheque
  • Bank transfers (EFT, RTGS)
  • Bills of exchange
  • Promissory notes
  • Letters of credit
  • Credit cards
  • Mobile money transfer
  • Payment reports


  • Overview of collections
  • Establishing targets
  • Collection planning
  • Collection cycle
  • 80/20 principle
  • Collection tools and methods
  • Computer aids to collection
  • Identification and measures taken on an initial default
  • Making contact with defaulters
  • Negotiation and structuring of offers
  • Rules for effective collection practices
  • Mistakes made during collection
  • Reasons for delays in payments
  • Third party collectors

Automation of the credit function

  • Process of automation of credit function
  • Benefits of automation of credit operations
  • Customer master file
  • Online credit management
  • Billing automation
  • Types of credit management information software

Emerging issues and trends

0 Replies to “Fundamentals of Credit Management – KASNEB Syllabus”

  1. Good morning,
    Is it possible to undertake a certificate course in credit management and through distance learning and if so, what are the requirements?Kindly let me know.

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