SAARC FINANCE,
REGIONAL SEMINAR, ISLAMABAD
What are Credit Risk
Management Paradigms
CLASSICAL Paradigm
Credit Analysis through “gut feel”
Credit Assessment through “ Experience”
Name Lending
MODERN Paradigm
• Credit Policy
and Underwriting standards
• Credit
Analysis (management, business & operating cycle, industry, cash
flows, capital structure, financial
projections
• Assessment
& Underwriting
• Risk Scorecards
• Risk Based Pricing - RAROC
• Credit Capital Management
• Dynamic Risk
Mitigation (Collateral, Structuring, Insurance & Hedging)
• Credit Risk
Management (Analytics and Management Actions)
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