Credit Risk and Loan Portfolio Auditing Training Course

Course Introduction

Credit risk is one of the most significant financial risks facing banks and other lending institutions because weaknesses in underwriting, approval, monitoring, documentation, collateral management, and recovery can materially affect profitability, liquidity, capital, and financial stability. The Credit Risk and Loan Portfolio Auditing Training Course provides a comprehensive framework for auditing credit processes and evaluating whether loan portfolios are managed within approved risk appetites and effective control structures.

The course examines the complete credit lifecycle, from customer onboarding and credit assessment through approval, disbursement, monitoring, restructuring, provisioning, recovery, and eventual closure or write-off. Participants will develop practical skills for assessing whether credit decisions are supported by reliable information, appropriate risk analysis, adequate documentation, delegated authority, and consistent application of credit policies.

Effective loan portfolio auditing requires more than reviewing individual loan files. Auditors must understand portfolio-level trends, concentration risks, sector exposures, delinquency patterns, collateral coverage, non-performing loans, restructurings, provisioning, and emerging vulnerabilities. The course therefore combines individual credit testing with portfolio analytics to help participants identify systemic weaknesses that may not be visible through isolated transaction reviews.

Participants will also examine the financial reporting and risk implications of impaired and distressed loans. Practical audit approaches will address loan classification, expected credit loss assessments, interest recognition, provisioning, write-offs, recoveries, collateral valuation, guarantees, restructuring arrangements, and management overlays. The emphasis is on obtaining sufficient and appropriate evidence to support conclusions about the quality and recoverability of loan assets.

Modern lending environments are being transformed by digital credit scoring, automated underwriting, alternative data, fintech partnerships, mobile lending, artificial intelligence, and increasingly complex customer and economic risk profiles. These developments create new challenges involving model risk, data quality, algorithmic decisions, cybersecurity, third-party systems, rapid credit expansion, and responsible lending. The course incorporates these emerging issues into the credit audit framework.

By the end of the program, participants will be equipped to plan and execute risk-based credit audits, evaluate loan files and portfolios, identify weaknesses in underwriting and monitoring, test impairment calculations, assess collateral and recovery processes, analyze portfolio trends, and communicate significant findings effectively. The program emphasizes practical audit judgment, evidence-based conclusions, data analytics, early-warning indicators, and sustainable improvements to credit risk governance.

Duration

10 days

Who Should Attend

• Internal auditors responsible for reviewing credit risk management and loan portfolio controls.

• External auditors conducting audits of lending institutions, credit portfolios, and financial statements.

• Credit risk managers responsible for portfolio quality, risk appetite, and credit governance.

• Loan portfolio managers overseeing credit performance, monitoring, restructuring, and recovery.

• Credit analysts involved in borrower assessment, financial analysis, and lending decisions.

• Banking operations managers responsible for loan administration and credit-related controls.

• Finance managers responsible for impairment, provisioning, interest recognition, and credit accounting.

• Risk and compliance officers evaluating lending practices against internal and regulatory requirements.

• Credit review and quality assurance professionals conducting independent assessments of lending decisions.

• Relationship managers and lending officers seeking stronger understanding of credit control and audit requirements.

• Recovery and collections professionals responsible for distressed loans, restructuring, and recoveries.

• Treasury and financial risk professionals assessing credit exposures and portfolio-level financial risks.

• Information systems auditors reviewing automated lending platforms, credit models, and data controls.

• Consultants and financial-sector professionals conducting credit risk, loan portfolio, and control reviews.

Course Objectives

• Develop advanced capabilities for planning and conducting risk-based audits of credit processes, lending operations, and loan portfolios across different customer segments.

• Evaluate credit policies, approval frameworks, delegated authorities, and underwriting procedures to determine whether lending decisions are properly controlled.

• Assess borrower financial information, repayment capacity, cash flows, collateral, guarantees, and other risk factors supporting credit decisions.

• Apply audit techniques to individual loan files and determine whether documentation, approvals, disbursements, monitoring, and account administration comply with requirements.

• Analyze portfolio-level indicators such as non-performing loans, arrears, concentration, migration, restructurings, write-offs, and recoveries to identify emerging risks.

• Evaluate the adequacy and reliability of loan classification, impairment, provisioning, expected credit loss calculations, and related financial reporting controls.

• Assess collateral management practices, including valuation, documentation, perfection, custody, insurance, monitoring, realization, and recovery procedures.

• Identify weaknesses in credit monitoring and early-warning systems that may prevent timely recognition and escalation of deteriorating borrower exposures.

• Apply data analytics to detect unusual lending patterns, policy exceptions, rapid credit growth, duplicate borrowers, concentration risks, and potentially problematic transactions.

• Evaluate restructuring, refinancing, rescheduling, collections, recovery, and write-off processes to determine whether distressed exposures are appropriately managed.

• Assess emerging credit risks associated with digital lending, automated credit scoring, alternative data, artificial intelligence, fintech partnerships, and model-based decision-making.

• Prepare evidence-based audit findings and practical recommendations that strengthen credit governance, portfolio quality, risk monitoring, impairment accuracy, and recovery effectiveness.

Comprehensive Course Outline

Module 1: Foundations of Credit Risk and Loan Portfolio Auditing

• Principles, objectives, and scope of credit risk auditing within modern banking and lending institutions.

• Roles of boards, management, credit committees, risk functions, internal audit, external audit, and credit operations.

• Major credit risks arising from borrower quality, underwriting weaknesses, portfolio concentration, and economic conditions.

• Risk-based approaches to auditing individual credit exposures and assessing overall loan portfolio quality.

Module 2: Credit Governance, Policies, and Risk Appetite

• Evaluating credit policies, risk appetite statements, lending mandates, approval frameworks, and portfolio risk limits.

• Assessing governance arrangements for credit committees, delegated authorities, escalation processes, and independent credit review.

• Reviewing policy exceptions, override procedures, authority breaches, and management reporting related to credit risk.

• Assessing whether credit governance structures support disciplined lending decisions and effective portfolio oversight.

Module 3: Credit Origination and Borrower Assessment

• Auditing customer onboarding, borrower identification, financial information, credit applications, and supporting documentation.

• Evaluating analysis of borrower income, cash flows, financial ratios, repayment capacity, and business sustainability.

• Reviewing credit scoring, risk grading, sector analysis, customer history, and other factors supporting lending decisions.

• Identifying weaknesses in borrower assessment that may result in inappropriate approvals or underestimated credit exposure.

Module 4: Credit Approval, Documentation, and Disbursement Controls

• Reviewing credit approval processes, delegated authority limits, committee decisions, conditions precedent, and approval documentation.

• Testing loan agreements, security documentation, guarantees, covenants, insurance, and other contractual requirements.

• Auditing disbursement controls to confirm that approved conditions have been satisfied before funds are released.

• Identifying unauthorized approvals, incomplete documentation, policy overrides, and premature or excessive loan disbursements.

Module 5: Loan Administration and Account Management

• Evaluating controls over loan account setup, interest rates, repayment schedules, fees, charges, and account amendments.

• Reviewing payment allocation, interest calculations, principal balances, overdue amounts, and loan statement accuracy.

• Testing changes to customer accounts, restructurings, waivers, concessions, and other post-disbursement modifications.

• Identifying administrative errors, unauthorized amendments, inaccurate balances, and weaknesses in loan servicing controls.

Module 6: Loan Portfolio Monitoring and Early-Warning Systems

• Assessing portfolio monitoring processes for arrears, delinquency, credit migration, covenant breaches, and borrower deterioration.

• Reviewing early-warning indicators and escalation procedures for exposures showing signs of increased credit risk.

• Analyzing portfolio trends by product, industry, geography, customer segment, maturity, and risk classification.

• Evaluating management information systems used to monitor portfolio quality and support timely risk intervention.

Module 7: Non-Performing Loans, Restructuring, and Recovery

• Auditing identification, classification, monitoring, and reporting of non-performing and distressed loan exposures.

• Reviewing restructuring, refinancing, rescheduling, moratoria, concessions, and other measures used to manage distressed borrowers.

• Assessing collections, recovery strategies, legal action, settlements, and realization of recoverable assets.

• Identifying risks where restructuring or refinancing may delay recognition of underlying borrower credit deterioration.

Module 8: Collateral, Guarantees, and Credit Risk Mitigation

• Evaluating collateral acceptance, valuation, documentation, registration, custody, insurance, and periodic revaluation procedures.

• Testing whether collateral values used in credit decisions and impairment assessments are supported by appropriate evidence.

• Reviewing guarantees, credit enhancements, insurance arrangements, and other forms of credit risk mitigation.

• Assessing realization procedures and determining whether security arrangements provide reliable protection against credit losses.

Module 9: Credit Impairment, Provisioning, and Financial Reporting

• Auditing loan classification, impairment recognition, provisioning methodologies, and expected credit loss calculations.

• Evaluating assumptions, probability of default, loss given default, exposure at default, forward-looking information, and management overlays.

• Reviewing interest recognition on impaired loans and assessing the accuracy of related financial statement disclosures.

• Testing model outputs, data inputs, adjustments, and governance procedures supporting credit impairment calculations.

Module 10: Portfolio Concentration, Stress Testing, and Credit Analytics

• Analyzing concentration risks by borrower, connected parties, industry, geography, product, collateral type, and other dimensions.

• Reviewing credit portfolio stress testing and assessing the effect of adverse economic, sectoral, or borrower-specific scenarios.

• Applying analytical procedures to identify unusual portfolio growth, migration trends, deterioration patterns, and emerging concentrations.

• Evaluating whether credit analytics provide management with timely and reliable information for risk-based decisions.

Module 11: Credit Fraud, Exceptions, and Irregular Lending Practices

• Identifying fraud risks involving borrower information, collateral, income verification, applications, approvals, and loan disbursements.

• Auditing related-party lending, conflicts of interest, connected borrowers, preferential terms, and unauthorized credit arrangements.

• Reviewing policy exceptions, manual overrides, suspicious applications, duplicate facilities, and unusual repayment patterns.

• Developing procedures for documenting, escalating, investigating, and reporting suspected credit fraud and control failures.

Module 12: Digital Lending, Credit Models, and Automated Decision-Making

• Auditing digital lending processes involving mobile applications, automated approvals, alternative data, and electronic documentation.

• Evaluating credit scoring models, automated decision rules, data quality, model governance, validation, and override controls.

• Assessing risks associated with artificial intelligence and machine learning in borrower assessment and credit decision-making.

• Reviewing third-party fintech platforms, data providers, APIs, and technology dependencies supporting automated lending operations.

Module 13: Sector, Economic, and Emerging Credit Risk Factors

• Assessing how interest rates, inflation, exchange rates, commodity prices, unemployment, and economic cycles affect borrower repayment capacity.

• Evaluating sector-specific risks affecting portfolios concentrated in industries vulnerable to economic or structural changes.

• Reviewing emerging risks associated with climate-related exposures, sustainability factors, technological disruption, and changing business models.

• Incorporating forward-looking risk indicators into audit planning, portfolio reviews, stress testing, and credit risk assessments.

Module 14: Credit Data Analytics and Continuous Portfolio Auditing

• Using data analytics to identify delinquency patterns, unusual approvals, rapid exposure growth, duplicate borrowers, and policy exceptions.

• Developing automated audit tests for loan balances, interest calculations, repayments, restructuring activity, and portfolio classifications.

• Applying continuous monitoring techniques to high-risk credit indicators and significant changes in borrower and portfolio behavior.

• Translating analytical exceptions into targeted audit procedures, supporting evidence, documented findings, and management actions.

Module 15: Credit Audit Findings, Reporting, and Remediation

• Developing audit findings that clearly describe credit control weaknesses, financial exposure, root causes, and risk implications.

• Quantifying potential losses, unsupported exposures, provisioning gaps, collateral shortfalls, and other material credit-related exceptions.

• Preparing professional credit audit reports for senior management, risk committees, audit committees, boards, and relevant stakeholders.

• Designing corrective action plans with responsible owners, implementation deadlines, validation procedures, and follow-up monitoring.

Module 16: Advanced Loan Portfolio Assurance and Future Credit Risks

• Integrating borrower-level testing, portfolio analytics, impairment review, collateral assessment, and governance evaluation into advanced credit audits.

• Assessing portfolio resilience under changing economic conditions, rapid digital lending growth, and evolving customer risk profiles.

• Developing forward-looking audit approaches for artificial intelligence, alternative data, fintech ecosystems, automated credit models, and emerging risks.

• Strengthening continuous credit assurance through portfolio surveillance, risk indicators, thematic reviews, control maturity assessments, and lessons learned.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: training@upskilldevelopment.com Tel: +254 721 331 808

Training Venue 

The training will be held at our Upskill Training Centre. We also offer training for a group (at a discount of 10% to 50%) at requested location all over the world. The Onsite course fee covers the course tuition, training materials, two break refreshments, buffet lunch, airport transfers, Upskill gift package, and guided tour.

Visa application, travel expenses, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Upskill certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: training@upskilldevelopment.com, +254 721 331 808

Terms of Payment:

Unless otherwise agreed between the two parties’ payment of the course fee should be done 3 working days before commencement of the training so as to enable us to prepare better.