CFI /
CBCA
/ /
Credit
/ /
Administration
/ /
and
/ /
Documentation Exam Questions With Correct
/ // // // //
Answers
//
Credit //Administration //and //Documentation
Session //Objectives //- //verified //answer(s)-
✔✔Understand //the //importance //of //credit //administration //and //documentation //
Understand //loan //approval //documentation //
Describe //the //loan //monitoring //process //and //documentation
Course //Overview //- //verified //answer(s)-✔✔Credit //administration //
Loan //approval //documentation //
Loan //monitoring //documentation
Credit //administration //is //all //about //- //verified //answer(s)-
✔✔documentation, //ongoing //monitoring, //and //possibly //re-
classifying //a //borrower //after //a //loan //has //been //made.
,Documentation
Timely, /
/relevant /
/and /
/thorough /
/documentation //is //critical //for //the //credit //administration //process //to //work //effectively. //Three
//key //documentation //categories //are: //- //verified //answer(s)-
✔✔• //Loan //Approval //documentation
• //Security //documentation //
• //Monitoring //documentation
Monitoring
The //borrower //must //be //carefully //monitored //and //continuously //re-
assessed. /
/This //is //important //when //changes //to //the //borrower's //situation //might //affect //their //ability //to
//repay //the //loan. //Monitoring //involves: //- //verified //answer(s)-
✔✔• /
/Undertaking /
/regular //reviews //of //a //borrower's //financial //statements //(at //least //once //a //year) //
• //Evaluating //financial //ratios //to //continuously //assess //how //this //may //impact //credit //risk //
•/
/Evaluating /
/changes /
/in //
a/
/borrower's /
/business, /
/industry /
/and //management //team //and //how //these //could //impact //a //borrower's //repayment //capacity
Re-Classifying
As //a //borrower's //account //is //monitored //it //may //need //to //be //re-assessed //and //re-
classified //to //better //reflect //the //level //of //credit //risk //present. //Re-
, classifying //includes: //- //verified //answer(s)-
✔✔• //Determining //the //new //level //of //credit //risk //associated //with //a //borrower //
•/
/Considering /
/changes //in //security, //covenants //and //loan //pricing //to //reflect //any //change //in //credit //risk
Credit //administration //is //crucial //for //- //verified //answer(s)-
✔✔monitoring /
/borrowers, /
/identifying /
/problems, /
/reducing //the //risk //of //credit //default, //and //protecting //the //organization //if //default //occurs.
Appropriate /
/credit //administration //and //documentation //practices //allow //for: //- //verified //answer(s)-
✔✔Better /
/information //for //more //informed //decisions //regarding //actions //taken //towards //a //borrower. //
Increased /
/comfort /
/that /
/the /
/lender /
/is /
/protected /
/in /
/case /
/of //
a/
/deterioration /
/in //a //borrower's //credit //quality //up //to //and //including //in //the //event //of //a //loan //default.
More //flexibility //to //respond //to //changes //in //a //borrower's //circumstances.
CBCA
/ /
Credit
/ /
Administration
/ /
and
/ /
Documentation Exam Questions With Correct
/ // // // //
Answers
//
Credit //Administration //and //Documentation
Session //Objectives //- //verified //answer(s)-
✔✔Understand //the //importance //of //credit //administration //and //documentation //
Understand //loan //approval //documentation //
Describe //the //loan //monitoring //process //and //documentation
Course //Overview //- //verified //answer(s)-✔✔Credit //administration //
Loan //approval //documentation //
Loan //monitoring //documentation
Credit //administration //is //all //about //- //verified //answer(s)-
✔✔documentation, //ongoing //monitoring, //and //possibly //re-
classifying //a //borrower //after //a //loan //has //been //made.
,Documentation
Timely, /
/relevant /
/and /
/thorough /
/documentation //is //critical //for //the //credit //administration //process //to //work //effectively. //Three
//key //documentation //categories //are: //- //verified //answer(s)-
✔✔• //Loan //Approval //documentation
• //Security //documentation //
• //Monitoring //documentation
Monitoring
The //borrower //must //be //carefully //monitored //and //continuously //re-
assessed. /
/This //is //important //when //changes //to //the //borrower's //situation //might //affect //their //ability //to
//repay //the //loan. //Monitoring //involves: //- //verified //answer(s)-
✔✔• /
/Undertaking /
/regular //reviews //of //a //borrower's //financial //statements //(at //least //once //a //year) //
• //Evaluating //financial //ratios //to //continuously //assess //how //this //may //impact //credit //risk //
•/
/Evaluating /
/changes /
/in //
a/
/borrower's /
/business, /
/industry /
/and //management //team //and //how //these //could //impact //a //borrower's //repayment //capacity
Re-Classifying
As //a //borrower's //account //is //monitored //it //may //need //to //be //re-assessed //and //re-
classified //to //better //reflect //the //level //of //credit //risk //present. //Re-
, classifying //includes: //- //verified //answer(s)-
✔✔• //Determining //the //new //level //of //credit //risk //associated //with //a //borrower //
•/
/Considering /
/changes //in //security, //covenants //and //loan //pricing //to //reflect //any //change //in //credit //risk
Credit //administration //is //crucial //for //- //verified //answer(s)-
✔✔monitoring /
/borrowers, /
/identifying /
/problems, /
/reducing //the //risk //of //credit //default, //and //protecting //the //organization //if //default //occurs.
Appropriate /
/credit //administration //and //documentation //practices //allow //for: //- //verified //answer(s)-
✔✔Better /
/information //for //more //informed //decisions //regarding //actions //taken //towards //a //borrower. //
Increased /
/comfort /
/that /
/the /
/lender /
/is /
/protected /
/in /
/case /
/of //
a/
/deterioration /
/in //a //borrower's //credit //quality //up //to //and //including //in //the //event //of //a //loan //default.
More //flexibility //to //respond //to //changes //in //a //borrower's //circumstances.
