Ajay Kumar Jhingan, our member and International Speaker/Trainer in Corporate and Retail Banking, has just created a new course in Global Risk Academy - The Fundamentals of Credit analytics and we want to ask him more about his course and how it will benefit our members.
1. Why have you decided to develop this course?
I have served banking industry in India for almost three decades. Credit department remained as one of my foremost choices. The main consideration, among other things, still remains that the money lent must come back.
This is the prime motive of a Credit Analyst to determine the likelihood that a borrower will meet the repayment obligations and pay back the loan with interest and charges, if any. This is because deposit creates resource, credit creates earning for the lender.
The resource is public money which is kept with banks on trust so that banks make available people’s money at the time of their need by way of withdrawals. Banks business is not only to welcome resource generation but also to lend and generate revenue. It is nothing but lending of the people’s money that has created resource on trust by way of deposits, i.e, someone’s money is to be given on trust to someone else (and has to be made available to the person to whom it belongs) at the time when it is needed.
This created an interest in me to develop the course so that someone’s money is lent safely within the principles of lending and security norms plus other factors which will help banks to minimize risks due to fear of default. The course is meant to create professionals at basic level to prepare themselves to vouch for the people’s money & safe lending.
Credit Analysis job has responsibility to assess the creditworthiness of the intending borrowers. There is a need to assess the likelihood that the borrower will be able to meet financial obligations and pay back the amount borrowed.
The course will help the participants to know what should be the various basic aspects which should be taken care to decide whether to accept or reject the application. If it is to be accepted, what should be the terms of sanction including interest and charges etc. The short duration course is designed to help the participants to look into the various basic aspects so as to acquire skills meant for the job.
3. In your opinion, what is most important to be a successful Credit Analyst?
Not only it is obvious but all the more important that new professional must have analytical thinking to be a Credit Analyst. This is because the nature of this profession demands evaluation of creditworthiness and analysis of a given situation, among other things, like meeting with people and reading credentials.
Basing upon what is stated above, the analysts have to take decision regarding suitability of extending credit or not. Unless the basics are not clear, the decisions may not be effective or analysis may not be fruitful. In this pretext, an effort is made to create a short duration course in various modules for quick learning and application in work area.
4. What other skills do you think a Credit Analyst must have? How does your course help the new comers or existing professionals?
In my opinion, communication skills are most important for a credit analyst and a desire to be a successful professional in the field of credit. Owning good communication skills can be a successful factor in this field only if one has knowledge about credit. What is to be communicated and in what regard is the need of the hour and a part of professional analytic environment.
This attracts attention towards professional mannerism by way of learning basic concepts what are discussed through various modules in the Credit Analysis Basics course. When a student acquires various terminologies and concepts through this short duration course & understands the importance thereof, the communication skills are supplemented with confidence and the objective of the course takes forward steps for mitigation.
In my opinion, learning never ends. The existing professionals are also helped through this course in a way that though they are ongoing professionals but revival of basics is practised.
Again, transferring skills is taken care and each module has assessments or quizzes at the end which every student will need to attend before going to next module.
5. Normally it is said that to be a Credit Analyst, person has to be a skilled financial analyst. What is your opinion?
Financial Analysis is a part of Credit Analysis. No one is a born financial analyst or credit analyst. Everybody has to learn before a professional acumen is acquired. One must know relative terminologies and prevalent concepts and how to apply them in work area. For example, which ratios should be worked and what ratios say and why? How to calculate ratios and for whom? How to critically analyse financial indicators and much more. In this process one must know that ratios are only a yardstick to measure and financial numbers are most important in terms of value. How good credit builds and bad credit cripples future plans is also given due thought.
Analysis should not be a biased one but it should be a meaningful and purposeful. These are some pertinent points and an effort is made by way of user friendly language through these modules to sensitize the new comers that credit is a dearest commodity and job of Credit Analyst is of utmost importance.