SME Credit Analysis and Risk Management Training Course

Duration 10 days 18 modules · 65 contact hours
Level Intermediate Certificate on completion
Who attends SME Relationship Manager, Credit Analyst and others
Fee from USD 2,200 KSh 190,000 for Kenyan organisations
Where 52 cities + online See dates by city
Next start 9 Nov 2026 Course code SD-BI-053

Before you join: Participants should understand basic lending products, the purpose of financial statements and common accounting terms such as revenue, gross profit, receivables, inventory, debt and equity.

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

SME lending decisions often rely on incomplete records, owner-managed businesses, seasonal cash flows and limited collateral. Credit staff must establish whether a borrower can generate sufficient cash to repay, identify where the credit case could fail, and propose terms that protect the bank without making viable lending impossible. Weak analysis can lead to avoidable arrears, poorly structured facilities, delayed risk escalation and inconsistent decisions between relationship teams and credit committees.

This course develops practical SME credit analysis and risk management capability from initial borrower assessment through approval, monitoring, restructuring and recovery. Participants assess business models, management quality, industry conditions and financial statements; rebuild reported accounts into credit-focused analysis; prepare cash flow forecasts; size facilities; assess working capital needs; value collateral; and assign internal risk ratings. The course also examines IFRS 9 staging, early-warning indicators, covenant design, problem-loan management and credit memorandum writing.

Teaching combines short instructor briefings with bank-style lending cases, financial statement analysis, group credit-committee discussions, borrower interviews, risk-rating simulations and structured application planning. Participants work with SME cases from trading, manufacturing, agriculture, construction and service businesses. They leave with a completed SME credit file containing a financial analysis, repayment assessment, risk rating, facility structure, covenant package, monitoring plan and approval recommendation.

The course is suited to banking and financial-services professionals who already work with business customers or credit decisions and need a more disciplined, evidence-based approach to SME lending risk.

What you will be able to do

  • Analyse SME business models, management quality and industry risks using a structured credit framework
  • Recast SME financial statements and calculate credit-relevant profitability, liquidity, leverage and coverage ratios
  • Build a 13-week cash flow forecast and assess repayment capacity under stressed assumptions
  • Size working-capital and term-loan facilities from operating-cycle, cash-generation and asset-life evidence
  • Assign an internal SME risk rating using quantitative, qualitative and behavioural risk factors
  • Structure credit facilities with appropriate security, covenants, conditions precedent and monitoring triggers
  • Prepare a credit memorandum that presents risks, mitigants, financial evidence and a defensible recommendation
  • Develop a complete SME credit proposal and present it to a simulated credit committee

Benefits of attending

For you

  • Produce better-supported SME lending recommendations with clearer repayment evidence
  • Identify warning signs hidden in owner-managed business accounts and cash movements
  • Challenge borrower assumptions using ratios, operating-cycle analysis and stress tests
  • Write credit memoranda that address likely credit-committee questions
  • Handle deteriorating SME facilities with earlier and more structured interventions

For your organisation

  • More consistent SME credit decisions across relationship and credit teams
  • Improved identification of repayment, concentration and collateral risks before approval
  • Better facility structures matched to working-capital cycles and asset lives
  • Earlier detection and escalation of deteriorating SME borrowers
  • Stronger credit files supporting internal review, audit and regulatory expectations

Course modules

18 modules over 10 days

Participants can frame an SME lending decision around repayment capacity, risk appetite and controllable mitigants.

  • SME lending economics, borrower information gaps and asymmetric information risks
  • Five Cs of credit applied to owner-managed business borrowers
  • Repayment source hierarchy: operating cash flow, secondary sources and security
  • Credit risk appetite translated into acceptable borrower and facility characteristics
  • Relationship management and independent credit challenge under delegated authorities
  • Credit life cycle from origination, approval and monitoring to recovery

Participants can assess how an SME creates cash, competes and depends on key counterparties.

  • Business model mapping: customers, value proposition, channels and cost drivers
  • Revenue quality assessed through contracts, order books and customer concentration
  • Supplier dependence measured through payment terms, substitution and purchase concentration
  • Management assessment covering experience, succession, governance and owner dependence
  • Site visits structured around operations, assets, controls and stock verification
  • Related-party transactions identified through ownership structures and account movements

Participants can convert industry and market information into relevant borrower-specific credit risks.

  • PESTLE analysis focused on borrower revenues, costs and operating permissions
  • Porter's Five Forces used to test margins and competitive durability
  • Industry cycles linked to demand volatility, pricing power and inventory exposure
  • Commodity, foreign-exchange and interest-rate exposures mapped to cash flow sensitivity
  • Construction, agriculture and trading risks compared through sector-specific drivers
  • Concentration risk assessed across geography, customers, suppliers and product lines

Participants can assess statement reliability and recast SME accounts for credit analysis.

  • Income statement recasting separates recurring earnings from exceptional items
  • Balance sheet adjustments identify related-party balances and non-operating assets
  • Cash flow statement limitations recognised in simplified SME financial reporting
  • Owner remuneration normalised against market-based management replacement costs
  • Accounting policies reviewed for revenue recognition, inventory and depreciation effects
  • Management accounts reconciled with audited statements, tax returns and bank activity

Participants can calculate and interpret core ratios within an SME credit assessment.

  • Gross margin trends tested against pricing, product mix and input costs
  • EBITDA quality assessed through recurring income and operating expense discipline
  • Current ratio and quick ratio interpreted alongside working-capital composition
  • Debt-to-EBITDA and debt-to-equity ratios tested against industry norms
  • Interest coverage calculated using EBIT, EBITDA and actual finance costs
  • Multi-year trend analysis distinguishes growth, deterioration and accounting distortions

Participants can identify working-capital funding needs from operational and financial evidence.

  • Cash conversion cycle calculated from receivables, inventory and payables days
  • Receivables ageing analysed for disputes, concentration and collection deterioration
  • Inventory turnover tested against obsolescence, seasonality and stock-count evidence
  • Payables patterns reviewed for supplier stress and unrecorded funding dependence
  • Peak working-capital requirements estimated from monthly trading and cash data
  • Borrowing-base availability calculated using eligible receivables and inventory haircuts

Participants can build a cash forecast and determine whether operating cash supports debt service.

  • 13-week rolling cash forecast built from receipts, payroll and supplier data
  • Direct cash flow forecasting separates cash timing from accounting profit
  • Debt service coverage ratio calculated using sustainable operating cash flow
  • Seasonal cash troughs matched against overdraft limits and repayment schedules
  • Assumption registers document sales volumes, margins, collections and payment timing
  • Forecast credibility challenged through historical variances and bank-account turnover

Participants can test borrower resilience under plausible adverse trading and funding conditions.

  • Sensitivity analysis measures effects of sales declines and margin compression
  • Downside scenarios model delayed collections, inventory losses and cost increases
  • Break-even analysis identifies minimum sales required to cover fixed costs
  • Cash flow headroom measured against debt service and committed facility limits
  • Reverse stress testing identifies conditions causing covenant breach or default
  • Management actions evaluated for timing, feasibility and cash preservation impact

Participants can align facility type, amount and repayment profile with the underlying business need.

  • Facility purpose verified against invoices, contracts, budgets and asset quotations
  • Overdraft limits sized from peak operating-cycle cash deficits
  • Revolving-credit structures matched to eligible short-term working-capital assets
  • Term-loan tenor aligned with asset life and cash-generating capacity
  • Bullet repayments assessed for refinancing reliance and exit-plan credibility
  • Multiple facilities coordinated to prevent duplicated funding of identical needs

Participants can assess security value, enforceability and limitations within a credit decision.

  • Security hierarchy distinguishes fixed charges, floating charges and personal guarantees
  • Loan-to-value ratios adjusted for valuation basis, volatility and disposal costs
  • Receivables security tested through assignability, ageing and dilution risk
  • Inventory collateral assessed for control, perishability, ownership and marketability
  • Property valuations reviewed for forced-sale assumptions and legal restrictions
  • Security perfection checked through registration, insurance and documentation conditions

Participants can assign and justify an internal risk rating using consistent risk drivers.

  • Internal rating grades linked to default risk and approval authority
  • Quantitative scorecard factors include leverage, coverage, liquidity and profitability
  • Qualitative overlays capture governance, industry risk and information reliability
  • Behavioural data reviewed through account turnover, arrears and excess usage
  • Override decisions documented with evidence, rationale and independent approval
  • Rating migration analysed for portfolio deterioration and review prioritisation

Participants can explain how borrower deterioration affects IFRS 9 staging and expected credit loss.

  • IFRS 9 staging distinguishes performing, underperforming and credit-impaired exposures
  • Significant increase in credit risk assessed using rating and behavioural triggers
  • Expected credit loss components: probability, exposure and loss severity
  • Forward-looking scenarios incorporated into SME portfolio provisioning assessments
  • Forbearance indicators examined for staging, impairment and reporting consequences
  • Credit analysis evidence supports timely risk classification and impairment review

Participants can design monitoring controls that detect deterioration and support lender rights.

  • Financial covenants set around leverage, coverage and minimum liquidity thresholds
  • Information covenants specify management accounts, debtor ageing and tax compliance
  • Positive covenants require insurance, security maintenance and lender notifications
  • Negative pledges restrict additional debt, asset sales and dividend extraction
  • Conditions precedent confirm legal capacity, security registration and documentation
  • Covenant headroom calibrated to forecast volatility and borrower operating realities

Participants can write a clear credit memorandum that supports a defensible approval decision.

  • Executive summary states request, purpose, recommendation and principal credit risks
  • Borrower narrative connects business model, management quality and trading performance
  • Financial analysis presents trends, adjustments, ratios and forecast assumptions
  • Risk-mitigation table pairs identified risks with controls and residual exposure
  • Approval conditions define required documents, covenants and pre-disbursement actions
  • Credit-committee presentation anticipates challenge on repayment, security and downside

Participants can establish a monitoring plan that identifies SME deterioration before default.

  • Annual review scope refreshed using current financials, ratings and facility utilisation
  • Early-warning indicators include arrears, returned payments and declining account turnover
  • Covenant compliance tracked through reporting calendars and exception escalation
  • Watchlist criteria distinguish temporary pressure from structural borrower deterioration
  • Portfolio segmentation prioritises reviews by exposure, risk grade and sector
  • Relationship contact plans document borrower discussions, actions and follow-up dates

Participants can select proportionate interventions for deteriorating SME facilities and document decisions.

  • Problem-loan diagnosis separates liquidity pressure from insolvency and viability failure
  • Forbearance options assessed through affordability, concessions and sustainable repayment capacity
  • Restructuring proposals test revised terms against cash flow and downside scenarios
  • Standstill agreements evaluated for information access, security and creditor coordination
  • Recovery strategies compare consensual sale, refinancing, enforcement and insolvency routes
  • Provisioning and escalation actions aligned with policy triggers and borrower evidence

Participants can recognise conduct, fraud and financial-crime issues that affect SME credit decisions.

  • Know-your-customer evidence reviewed for ownership, control and beneficial ownership
  • Source-of-funds checks linked to facility purpose and transaction patterns
  • Fraud red flags include falsified invoices, circular trading and account manipulation
  • Conflicts of interest identified in related-party lending and connected exposures
  • Credit file records preserve decision rationale, approvals and material communications
  • Escalation protocols address suspected fraud, sanctions concerns and misconduct

Participants can build, review and present a complete SME credit proposal with a justified approval recommendation.

  • Borrower case file reviewed for business, financial and behavioural evidence
  • Financial statements recast and ratios calculated for credit decision-making
  • Cash forecast built with base, downside and reverse stress scenarios
  • Facility structure sized with tenor, security, covenants and conditions
  • Internal risk rating assigned with documented qualitative and quantitative rationale
  • Credit memorandum presented, challenged and revised through committee review

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

What you take back to work

  1. SME credit assessment template
  2. Financial statement recasting model
  3. 13-week cash flow forecast model
  4. SME risk-rating worksheet
  5. Credit memorandum template
  6. Portfolio monitoring checklist

Who should attend

  • SME Relationship Manager — needs stronger borrower assessment and credit proposal skills
  • Credit Analyst — prepares financial analysis, risk ratings and approval submissions
  • Credit Officer — assesses lending requests and monitors approved facilities
  • Credit Underwriter — evaluates repayment capacity, security and facility terms
  • Portfolio Manager — identifies deteriorating SME exposures and prioritises interventions
  • Credit Risk Manager — sets review standards and challenges lending recommendations

Skills and tools covered

SME financial analysisCash flow forecastingCredit risk ratingFacility structuringCollateral assessmentProblem loan management

Tools and standards

IFRS 9, Basel III, PESTLE analysis, Porter's Five Forces

How the course runs

Training methodology

The instructor uses short technical briefings followed by lender-style case work, financial statement reviews, borrower fact patterns and credit-committee discussions. Participants calculate ratios, rebuild cash flows, assess collateral, assign risk ratings and test proposed facility structures against adverse scenarios. Group exercises compare approval recommendations and challenge assumptions using documented evidence. Simulations address borrower meetings, covenant breaches and early-warning escalation. Each participant progressively develops an SME credit case, then applies course methods to an action plan for their own portfolio or approval role.

Requirements and prerequisites

Participants should understand basic lending products, the purpose of financial statements and common accounting terms such as revenue, gross profit, receivables, inventory, debt and equity. At least six months of experience in SME banking, business lending, credit operations, relationship management, audit or finance is useful. Participants should be comfortable working with percentages and spreadsheet calculations. Prior credit-committee experience, advanced accounting knowledge, financial-modelling expertise or formal risk qualifications are not required. The course explains the required credit concepts before applying them to lending cases.

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

You should understand basic business lending products and be able to read simple financial statements. Experience in SME banking, credit, relationship management, audit or finance is useful, but advanced modelling and formal risk qualifications are not required.

Bring a laptop with spreadsheet software if possible, as participants work with financial analysis and cash-flow templates. You may also bring an anonymised SME case or portfolio issue for your personal application plan.

It is designed primarily for SME relationship managers, credit analysts, underwriters, credit officers and portfolio managers. Risk, audit and collections professionals who review SME lending decisions will also benefit.

This course focuses on owner-managed businesses, incomplete information, working-capital volatility, personal guarantees and relationship-led lending. It gives more attention to short-term cash forecasting, borrower behaviour, collateral practicality and early intervention.

Participants can use the templates to review live or upcoming SME lending requests, subject to their employer's confidentiality rules. The methods support borrower meetings, credit memoranda, annual reviews, covenant monitoring and watchlist discussions.

Each training day runs from 08:30 to 16:30 and provides about 6.5 contact hours. The first part builds analysis tools and financial judgement, while the later sessions focus on structuring, monitoring, problem loans and the final credit-proposal capstone.

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

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