Loan Assessment for Credit Unions
Now more than ever every credit union needs to have a proper system for dealing with loan applications from members. The management and staff who are reviewing these applications need the latest information and knowledge to make the best possible decision every time and to avoid the possibility of a default down the line.
Declan Flood, who is well known in credit union circles, has developed a one day training course that can be delivered to your management, staff and credit committee members in your credit union in a single day, that can be delivered in your own credit union or at Chapter level if that works best. Due to the interactive nature of this course numbers are limited to ten people.
We start with your loan application process and credit policy to agree the appropriate requirements based on the loan amount and the past history of the member, in conjunction with the rules laid down in your credit union regarding maximum loan amounts and the duration of those loans.
The day is a mix of tutor led learning, case studies and workshops to make sure everyone present knows, understands and more importantly will be in a position to apply the knowledge in the real world the very next day.
To book this training for your credit union please click here.
There is a fine balance between lending and good lending and right from the start you have to ensure the right amount of money is given to the right people for the right reasons. We know members lie on their application forms, most times these are lies of omission rather than false information, you have to use your skill to look at the facts presented and get to the real reason that is often hidden behind the information you are given.
We will explain the concept of matching and how it relates to every single application.
You will discover the ten things you have to take into account when making a credit decision and how to quantify each of them and what weight should be given to each area. This section is both for the benefit of the members and the credit union when you get it right.
We will explore some scoring models and how you can incorporate them into your current approval system. By understanding the simple scoring system, you will be able to pinpoint the action the member has to take in order to improve their access to credit.
Credit unions look at things differently, so this day incorporates the credit union ethos on helping members in every way possible, sometimes dragging them deeper into debt is not in the long term interest of the member and will have a negative impact on the credit union.
The course also includes some ideas on how to communicate a loan refusal to a member, as this area alone can be the cause of a currently performing loan and excellent member turning their backs on the credit union altogether.
You also know that refusing a small loan will more than likely force the member into the hands of high cost money lenders, who will get paid before the credit union.
The workshop section will firstly look at bank statements and sets to create the story the numbers are telling you rather than simply looking at the numbers themselves. In the same way participants will be given an insight into the world of the self-employed and explain in simple terms how to read a set of accounts and the main things you should be looking out for and the additional information you should get from them in advance of considering their application. In reality you know how the business is going (They wouldn’t be sitting in front of you right now if it was going great!) So you have to establish if granting the loan at this stage is a good idea.
The second workshop looks at a number of case studies, where you are presented with information and apply the learning to arrive at the best possible decision. There will also be discussion around the results as everyone will look at the data differently and come to different conclusions.
We can find lots of reasons for not granting credit, this course is designed to be commercial and to find a way, if it makes sense to give the loan and get it repaid in a reasonable time, it looks at finding a way to communicate with the member exactly what they have to do in order for the loan to be granted. The simple fact is that most credit unions are experiencing dwindling loan books and the business of the credit union is to lend money and get it back, in my view these are the two central functions.
Finally we will look at the area of top up loans. This seems to be the norm in most credit unions and can lead to creeping debt that can get out of hand over time. Top up loans are great if they are for a specific purpose, they are bad if they are being taken out to fund a lifestyle, particularly when there is a gulf between the lifestyle they are living and the one they can afford. Top up loans can hide this problem in the short term, however in the long term it will have an impact.
This course is focused on educating the loans officer to be in a better position to help the member to manage their credit obligations in a consistent and manageable way. When the principles are applied the course will benefit both the credit union and the member to understand and use credit in a more responsible way.
As with all the training we offer in Loans Assessment, Credit Control, Management, Negotiations and Teamwork – it is all about timing and the sooner you take action the sooner you will benefit from the results.
Be among the first to experience this brand new training based on simple and effective methods that have been tried and tested over the years and has the potential to improve the quality of your loan book over time.
The course runs from 9.30am to 4pm and at the end participants will have a comprehensive set of notes and tools they can start to use straight away. The course can be run on your closed day or on a Saturday if that suits you better.
To book your date or to get more information you can contact Mary on 01 659 9466 or Declan on his mobile 087 244 7052. You can email us on firstname.lastname@example.org We look forward to talking with you and to helping you in any way we can.
In addition to the risk assessment tools and the scoring models, I will give you my Personal Budgeting Tool that you can give to members to help them get in control of their finances. The tool is available in Excel format and by entering top line information it will show you what your bank balance will be on a daily basis, for the next year.