Microfinance Credit Risk Management Training Course

Duration 5 days 10 modules · 33 contact hours
Level Intermediate Certificate on completion
Who attends Credit Managers, Branch Managers and others
Fee from USD 1,100 KSh 95,000 for Kenyan organisations
Where 52 cities + online See dates by city
Next start 16 Nov 2026 Course code SD-RM-079

Before you join: Participants should understand basic lending operations, loan products, repayment schedules, interest calculations and common credit documentation.

Dates & prices

Two start dates a month in every city, and live online on weekdays or weekends. Fees are per participant; classroom fees include tuition, materials, lunch and refreshments, and the certificate.

Suggest a date or city

Showing the next six months. Later dates, other cities and private deliveries for your team are available on request.

Course overview

Microfinance lenders manage credit risk under conditions that make conventional lending controls insufficient: borrowers may have irregular income, limited formal records, seasonal cash flows, informal enterprises and exposure to climate, market or political shocks. Weak borrower assessment, poor portfolio monitoring or delayed collections can rapidly increase arrears, impair liquidity, erode loan-loss reserves and damage client relationships. Managers need disciplined methods that protect portfolio quality while maintaining responsible access to finance.

This course develops the credit risk management practices used by microfinance institutions, cooperative lenders, micro-lenders and financial inclusion programmes. Participants assess repayment capacity using household cash-flow methods; apply the Five Cs of Credit; strengthen group and individual lending controls; build scorecards and credit grading approaches; monitor Portfolio at Risk, roll rates and vintages; manage delinquency; and establish appropriate restructuring, write-off and provisioning decisions. The course also addresses credit risk appetite, delegated authority, fraud controls, consumer protection, IFRS 9 expected credit loss concepts, stress testing and board reporting.

Instruction combines focused briefings with lender case work, portfolio-data interpretation, credit-file reviews, collections simulations and structured group analysis. Participants work with realistic cases involving agricultural borrowers, urban microenterprises, group lending and digitally originated loans. They leave with a practical microfinance credit risk management pack containing a credit assessment template, portfolio monitoring dashboard, arrears management framework, provisioning matrix and 90-day improvement plan. A certificate of completion is issued to participants who complete the five-day programme.

The course is designed for lending professionals who already understand basic loan operations and need stronger tools for controlling default risk, detecting deterioration early and making sound credit decisions.

What you will be able to do

  • Set credit risk appetite limits, delegated authorities and escalation triggers for a microfinance portfolio
  • Assess borrower repayment capacity using household cash-flow analysis and the Five Cs of Credit
  • Build practical credit scorecards, grading rules and documented override controls
  • Analyse portfolio quality using PAR, roll-rate, vintage, cohort and concentration analysis
  • Design early-warning, collections and restructuring actions matched to delinquency causes
  • Manage group lending, individual lending and digital-channel credit risks using appropriate controls
  • Calculate provisioning needs using arrears data, expected credit loss concepts and stress scenarios
  • Present credit risk reports, action plans and exception decisions to management or credit committees

Benefits of attending

For you

  • Make better lending recommendations using documented repayment-capacity evidence
  • Identify deteriorating loans before they enter serious delinquency
  • Interpret PAR, roll-rate and vintage reports with confidence
  • Handle restructurings and collections decisions more consistently
  • Produce credit committee reports with clear risk actions

For your organisation

  • Lower avoidable arrears through earlier warning and targeted collections action
  • Improve credit decision consistency across branches, products and loan officers
  • Strengthen loan-loss provisioning and write-off governance
  • Reduce fraud, policy exceptions and weak credit-file documentation
  • Give management clearer portfolio risk reporting and escalation information

Course modules

10 modules over 5 days

Participants can define a credit risk framework that links lending objectives, risk appetite and control responsibilities.

  • Credit risk appetite linked to mission, growth targets and capital
  • Five Cs assessment adapted for group, individual and agricultural lending
  • Risk culture, delegated authority and three-lines accountability in lending
  • Board-approved credit policies translated into branch-level decision limits
  • Product terms creating repayment stress, adverse selection or moral hazard
  • Portfolio segmentation by product, branch, geography, officer and borrower cohort

Participants can assess borrower repayment capacity and document defensible underwriting recommendations.

  • Household cash-flow analysis separating business, household and seasonal income
  • Income verification using observation, supplier references and transaction evidence
  • Debt-service capacity calculated from net disposable cash and repayment frequency
  • Character assessment documented through residence checks, references and repayment history
  • Collateral valuation, legal enforceability and liquidation discounts for secured loans
  • Guarantor analysis distinguishing capacity, willingness and correlated default exposure
  • Credit memoranda presenting repayment source, risks, mitigants and recommendation

Participants can develop and govern practical scoring, grading and exception-management approaches.

  • Scorecard development using historical repayment data, binning and weight selection
  • Judgmental scorecards where data volume cannot support statistical models
  • Logistic regression outputs interpreted through odds, cut-offs and discrimination
  • Reject inference limitations and sample bias in accepted-loan datasets
  • Override rules, reason codes and approval controls for exceptions
  • Validation using Gini coefficient, KS statistic, stability and back-testing
  • Fair-treatment checks for prohibited discrimination and proxy variables

Participants can apply controls suited to group, individual and digitally delivered microloans.

  • Joint-liability mechanics, social collateral and risks of contagion
  • Centre meeting attendance as an early warning repayment indicator
  • Group formation checks for affinity, residence and economic diversity
  • Peer monitoring incentives and free-rider failures within borrower groups
  • Individual lending controls for informal enterprises and thin-file borrowers
  • Agent and digital-channel fraud risks affecting borrower assessment
  • Consumer-protection requirements for disclosure, collections conduct and complaints

Participants can measure portfolio deterioration and identify its product, branch and borrower drivers.

  • PAR 30, PAR 90 and write-off ratios calculated consistently
  • Vintage analysis separates underwriting quality from collection deterioration
  • Roll-rate matrices quantify migration between arrears buckets and cure rates
  • Cohort analysis identifies product, branch and officer-level concentration
  • Restructured-loan reporting distinguishes genuine rehabilitation from concealment of arrears
  • Geographic concentration mapped against climate, conflict and market shocks
  • Management information dashboards reconcile disbursements, collections, arrears and write-offs

Participants can identify deteriorating accounts early and direct timely corrective action.

  • Early warning indicators drawn from repayment behaviour and field observations
  • Daily arrears reports prioritised by days past due and exposure
  • Contact strategies matched to delinquency stage, cause and borrower vulnerability
  • Root-cause analysis distinguishes willingness, capacity, process and external shocks
  • Promise-to-pay tracking measures collector follow-through and cure performance
  • Branch action meetings assign owners, deadlines and escalation triggers
  • Collections conduct controls prevent harassment, coercion and reputational damage

Participants can manage delinquent loans using proportionate, documented and client-responsible treatments.

  • Collections workflow from first missed instalment through legal recovery
  • Segmentation assigns reminder, visit, restructure or recovery treatment paths
  • Restructuring tests assess viability, affordability, concessions and repeat rescheduling
  • Write-off policy separates accounting derecognition from continuing recovery activity
  • Field collector productivity measured through contacts, collections, cures and cost
  • Complaint handling, consent and data privacy during collection contact
  • Fraud red flags in cash handling, receipts and recovery reporting

Participants can assess loan-loss reserves and connect credit portfolio data to accounting decisions.

  • IFRS 9 stages connected to delinquency, credit deterioration and defaults
  • Expected credit loss combines PD, LGD, EAD and forward-looking scenarios
  • Practical provisioning matrices for portfolios lacking long historical datasets
  • Write-off thresholds, recoveries and interest suspension under accounting policy
  • Loan-loss reserve adequacy assessed against PAR, vintage and stress results
  • Reconciliation between credit MIS, general ledger and financial statements
  • Management judgments documented for overlays, scenarios and model limitations

Participants can assess portfolio resilience and prepare credit risk responses to adverse scenarios.

  • Portfolio stress tests model drought, inflation, conflict and currency shocks
  • Sensitivity analysis quantifies PAR, losses, liquidity and capital effects
  • Scenario design links macroeconomic drivers to borrower cash-flow pressure
  • Risk appetite metrics establish limits, triggers and management actions
  • Credit concentration limits by sector, geography, product and funding source
  • Contingency actions sequence underwriting changes, collections capacity and liquidity protection
  • Board reporting presents exposures, breaches, assumptions and required decisions

Participants can strengthen credit governance and create a measurable credit risk improvement plan.

  • Credit committee packs present decisions, exceptions, trends and emerging risks
  • Delegated authority matrices align limits with competence and independence
  • Internal controls test file completeness, approval compliance and data integrity
  • Internal audit sampling targets override patterns, fraud signals and delinquency
  • Key risk indicators linked to thresholds, owners and escalation routes
  • Risk-adjusted pricing considers operating cost, expected loss and margin
  • 90-day credit risk action plan assigns priorities, owners and measures

Exercises and examples are adapted to each cohort's sectors and roles.

What you take back to work

  1. Household cash-flow credit assessment template
  2. Credit scorecard and override-control checklist
  3. PAR, vintage and roll-rate dashboard model
  4. Early-warning and arrears action framework
  5. Loan-loss provisioning matrix
  6. 90-day credit risk improvement plan

Who should attend

  • Credit Managers — responsible for underwriting standards, portfolio quality and approval controls
  • Branch Managers — accountable for branch growth, arrears performance and collections discipline
  • Loan Officers — need stronger borrower assessment and early delinquency detection methods
  • Risk Managers — monitor portfolio exposure, risk appetite and credit control effectiveness
  • Collections Managers — require structured arrears segmentation, recovery and restructuring methods
  • Internal Auditors — test loan file quality, override controls and credit process compliance

Skills and tools covered

Credit underwritingPortfolio quality analysisDelinquency managementLoan-loss provisioningCredit risk reportingStress testing

Tools and standards

Portfolio at Risk (PAR), IFRS 9 Financial Instruments, Five Cs of Credit, CAMEL rating framework

How the course runs

Training methodology

The course uses short instructor briefings to introduce credit risk methods, followed by lender cases, credit-file analysis, group exercises and portfolio-data interpretation. Participants examine borrower cash flows, assess loan applications, interpret arrears trends and select appropriate collections or restructuring responses. Simulations address credit committee decisions, group lending problems and emerging portfolio stress. Facilitated discussion compares operational controls used by different lending models. Each participant prepares an application plan for improving credit risk controls within their own lending function.

Requirements and prerequisites

Participants should understand basic lending operations, loan products, repayment schedules, interest calculations and common credit documentation. At least six months of experience in microfinance, retail lending, cooperative finance, SME lending or loan administration is recommended. Familiarity with spreadsheets and basic portfolio reports is useful because the course uses arrears, repayment and loan-book data. Participants do not need prior experience with statistical modelling, IFRS 9 modelling, programming or advanced accounting. The course explains required calculations and risk measures step by step before applying them to lending decisions.

A typical training day

08:30 – 10:30First session
10:30 – 10:45Refreshment break
10:45 – 12:30Second session
12:30 – 13:30Lunch and networking
13:30 – 15:00Third session
15:00 – 15:15Refreshment break
15:15 – 16:30Workshop and daily review

Live online deliveries follow the same structure in East Africa Time, with shorter screen blocks and longer breaks.

What the fee includes

  • Instruction by a practitioner facilitator
  • Full course workbook and materials
  • Exercise files, templates and case studies
  • Refreshments and lunch on classroom deliveries
  • Certificate of completion
  • Post-course application plan

Frequently asked questions

Participants should understand basic lending operations, repayment schedules and loan documentation. Previous experience in microfinance, retail lending, cooperative finance or SME lending is recommended, but advanced risk modelling experience is not required.

Bring a laptop if possible, as participants may work with sample portfolio reports and spreadsheet-based analyses. You may also bring non-confidential versions of your credit policy, arrears report or lending forms for reference.

The course is designed for credit managers, branch managers, loan officers, risk professionals, collections managers and internal auditors. It is especially relevant for staff responsible for portfolio quality, delinquency reduction or credit approval controls.

General credit analysis courses often focus on corporate financial statements, collateral and formal business accounts. This course addresses the distinctive credit risks of microfinance, including household cash flows, group lending, informal enterprises, PAR management and responsible collections.

Participants can use the templates and methods to improve borrower assessments, review portfolio reports, structure branch arrears meetings and strengthen exception controls. The final action plan identifies immediate changes suitable for their own lending function.

The programme runs from 08:30 to 16:30 each day, providing about 6.5 contact hours daily. Time is divided between instructor input, case analysis, data interpretation, simulations, group discussion and application planning.

Questions about this course?

Ask about dates, fees, group bookings or running it for your team. Our training team replies by email.

Ask on WhatsApp info@skillsetdevelopment.com

More courses in Risk Management

Risk Management Insurance Risk Management Training Course 10 days · from USD 2,200 · next 16 Nov Risk Management Investment Risk Management Training Course 5 days · from USD 1,100 · next 16 Nov Risk Management Loss Prevention and Risk Management Training Course 5 days · from USD 1,100 · next 16 Nov Risk Management Managing Business Uncertainty Training Course 5 days · from USD 1,100 · next 16 Nov Risk Management Microfinance Risk and Compliance Training Course 10 days · from USD 2,200 · next 16 Nov Risk Management Operational Risk Management Training Course 10 days · from USD 2,200 · next 16 Nov Risk Management Process Risk Assessment Training Course 5 days · from USD 1,100 · next 16 Nov Risk Management Project Risk Assessment Training Course 5 days · from USD 1,100 · next 16 Nov