Learning Objectives:

  • Structure and write effective credit memoranda.

  • Perform loan reviews and risk rating assessments.

  • Contribute to a healthy credit culture through portfolio monitoring.

8.1 Writing the Credit Memo

The credit memo is the primary communication tool for credit decisions. The IBA programme covers “Elements of an Effective Credit Memo” and “Making Loan Recommendations and Rating the Risk” . A strong credit memo tells “the story” of the credit, summarising key risks and mitigants.

8.2 Loan Review and Risk Rating

Loan review is the process of assessing the quality of the loan portfolio. The IBS Certificate in Commercial Credit covers “Credit and the Decision Process,” “Integrated Analysis and Decision-making,” and “Risk Mitigation through loan structure” . The IBA programme’s audience includes “Loan Review Officers” .

8.3 Portfolio Monitoring and Credit Culture

The IBA programme covers “Monitoring the Collateral and the Credit” and “Contributing to a Healthy Credit Culture” . Effective credit risk management requires ongoing portfolio monitoring to identify early warning signals of deteriorating credit quality. A strong credit culture is an environment of shared values and beliefs about credit risk, essential for sustainable risk management.

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