chartered institute of credit management, ghana...
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CHARTERED INSTITUTE OF CREDIT MANAGEMENT, GHANA (CICMG)
PROFESSIONAL CERTIFICATION PROGRAMME
OUTLINE OF SYLLABUSES AND GUIDELINES
2019
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CONTENTS
The Institute …………………………………………………………………………...2
Credit Management in Modern Organizations……………………………..............3
Programme Structure …………………………………………………………………5
General Guidelines…………………………...………………………………………45
Examination Period…………………………………………………………………..46
Professional Certification Board …………………………………………………....46
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THE INSTITUTE
The Chartered Institute of Credit Management (Ghana) has been incorporated in
Ghana under the Professional Bodies Registration Act, 1973 (NRCD 143). The
Council affirms that the sole objective of the Chartered Institute of Credit
Management, Ghana is to provide sterling education and training to enable persons
qualify to practice or engaged in the practise of credit, risk and banking.
It is important stride toward management and without it, a financial institution,
credit bureaus, trade organisations, debt collection agency employees cannot hope
to climb very far in the profession
THE MISSION
The Council affirms that the sole objective of the Chartered Institute of Credit
Management, Ghana is to provide sterling education and training to enable
persons qualify to practice or engaged in the practise of credit, risk and banking.
CREDIT MANAGEMENT IN MODERN ORGANISATIONS
The credit risk management function has changed dramatically. The function has
expanded beyond its previous focus on lending management activities. In
modern organizations, the credit practitioner is expected to add value to the
business by designing and aligning credit risk models, systems and policies with
corporate goals and strategies.
Value addition credit practice or management requires the possession of
professional Credit Management knowledge, skills, values and attitudes which
come only with professional training.
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It is against this background that the professional certification programme
(PCP) was designed and launched in April, 2017.
The programmed is designed to provide profession training for persons who
desire to practise credit risk management in organisations.
The CICMG Professional Qualification comprises three levels. The 3-level
structure is set out as below:
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CICMG PROFESSIONAL QUALIFICATION PROGRAMME
LEVEL TITLE OF PAPER
LEVEL I (KNOWLEDGE) Principle of Credit Management
Business Communication and Personal Skills
Quantitative Tools in Business
Commercial Law
Information Communication Technology
LEVEL II (SKILLS) Credit Management – Lending
Business Environment
Export /International Credit
Laws Governing Credit Practice
Accounting Principles
Trade Credit Management
LEVEL II (PROFESSIONAL) Advanced Corporate Lending
Governance, Risk and Ethics
Process Improvement
Debt Recovery Procedure and Practice
Credit Practise
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LEVEL I (KNOWLEDGE)
SUBJECT NO.1 PRINCIPLE OF CREDIT MANAGEMENT
GENERAL OBJECTIVE
This subject is intended to equip the candidate with the knowledge, skills and
attitude that will enable him/her to apply to concepts, systems and techniques
of credit management
LEARNING OUTCOMES
A candidate who passes this subject should be able to:
(a) Apply the principles of credit in a business environment
(b) Analyse the effects of cost of credit to the business and economy as a
whole
(c) Perform debt collections
(d) Organise and supervise as credit risk department
INDICATIVE CONTENT
Introduction to credit
Definition of credit
History of credit
Reason for and benefits of extending credit
Effect of credit to the business
Categories of credit (consumer; trade and export credit)
Credit department structure and responsibilities
Organisational structure of a credit department
Role of the credit department within an organisation
Reporting lines of a credit department within an organisation
Reporting performance of a credit department
Credit department staff recruitment and retention
Promoting relationship (between credit department with other
departments within the organisation)
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The Credit Policy
Definition of a credit policy
Objectives of a credit policy
Types of credit policy
Features of a credit policy
Advantages of a credit policy
Contents of a credit policy
Formulation and implementation of a credit policy
Operational principles of a credit policy
Factors to consider when developing a credit policy
Credit risk management
Credit risk defined
Forms of credit risk
Distinction between credit management and risk management
Common causes of credit risk situations
Objectives of credit risk management
Role of senior management and Board of directors in risk management
Best practices in credit risk management
Credit scoring
Methods against credit risk hedging
Credit culture
Credit Insurance
Sales Ledger Administration
Definition of sales ledger
Sales ledger format and contents
Statements and reports
Sales ledger control
Importance and interpretation of a sales ledger Credit Terms
Definition of credit terms
Factors affecting determination of credit terms
Types of credit terms
Effects of credit terms on working capital management
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Payment Methods
Definition of payment method
Factors to consider in choosing payment method
Types of payment methods
Advantages and disadvantages of various payment methods
Collection Management
Overview of collections
Establishing targets
Collection planning
Collection cycle
80/20 principle application in collections
Collection tools and methods
Computer as an aid to collection
Communication with defaulters
Tracing gone away debtors
Restructuring of debts
Rules for effective collection practices
Mistakes made during collection
Reasons for delays in payments
Third party collectors
Collection through alternative dispute resolutions (ADR)
Legal process for debt recovery Credit Insurance
Definition of credit insurance
Characteristics of a good credit insurance cover
Basic principles of domestic credit insurance
Financing of credit insurance premiums
Benefits of credit insurance to an organisation
Types of credit insurance policies
Advantages and disadvantages of credit insurance
Automation of Credit Function
Process of automating of credit function
Benefits of automating credit operations
Types of credit management information software
Customer master file
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Online credit management
Billing management system Emerging Issues and Trends
SUBJECT NO.2 BUSINESS COMMUNICATION AND PERSONAL SKILLS
GENERAL OBJECTIVE
This subject is intended to equip the candidate with the knowledge, skills and
attitudes required for credit controller and debt collection specialist and
enforcement work.
LEARNING OUTCOMES:
A candidate who passes this subject should be able to: (a) Understand the personal skills and behaviours required at work. (b) Know how to communicate in the business environment.
(c) Be able to use effective communication and personal skills to build good relationships with colleagues and customers.
INDICATIVE COURSE CONTENT
Personal skills and behaviours required at work
Importance of a range of personal skills
Identification of personal strengths and challenges
Organisational measurement of quality of telephone collections
Communication in the business environment
Effective communication using a variety of media
Building good relationships with colleagues and customers
Resolving issues using communication and personal skills
Effective team working
Progressive business communications and personal skills
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SUBJECT NO.3 QUANTITATIVE TOOLS IN BUSINESS
GENERAL OBJECTIVE
This subject is intended to equip the candidate with knowledge, skills and
attitudes that will enable him/her to use quantitative analysis tools in business
operations and decision making
LEARNING OUTCOMES
A candidate who passes this subject should be able to:
(a) Apply accurately the key tools of basic maths in simple business and
accounting
(b) Apply accurately both numerically and graphically equations and
inequalities in simple business
(c) State, explain and apply the key tools of mathematics used in business
finance problems
(d) Apply accurately in simple business-related situations the key tools of
basic calculus State, explain and apply key measures of central tendency
in business related situations
(e) State, explain and apply key measures of dispersion in business related
situations
(f) State, explain and apply rules of probability in business related situations
(g) Apply accurately in simple business situations basic tools of financial and
operational forecasting
INDICATIVE CONTENT
Review of basic mathematics
Fractions
Percentages
Algebra
Powers and indices
Sequence and series
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Equalities and inequalities
Coordinates and graphs
Straight line equations
Simultaneous equations
Curves
Inequalities
Mathematics of business finance
Compound interest
Discounting and the time value of money
Annuities
Present value of annuities
Sinking funds and amortisation
Elements of calculus
Uses of calculus
Differentiation
Integration
Identification and determination of stationary points
Elements of optimisation (Maximum and minimum)
Linear Programming
Simplex method
Graphical method
Data collection
Frequency distributions – simple and cumulative
Histograms, frequency polygons and ogives
Measures of central tendency
The concepts of averages
The arithmetic mean
The median
The mode
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Quartiles
Measures of dispersion
The concept of dispersion
Range
Mean deviation
Quartile deviation
Standard deviation
Variance
Probability
Basic rules of probability
Mutually exclusive, independent and conditional probability
Expected values
Tree diagrams
The normal distribution
Forecasting
Time series
Correlation and Regression Analysis
Trend, seasonal variations, cyclical variations and random variations
Moving average trend
Forecasting
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SUBJECT NO.4 COMMERCIAL LAW
GENERAL OBJECTIVE
This subject is intended to equip the candidate with knowledge, skills and
attitudes that will enable him/her to apply the principles and provisions of
business law in various business environments.
LEARNING OUTCOMES
A candidate who passes this subject should be able to:
(a) Demonstrate knowledge of essential elements of the legal system
(b) Demonstrate knowledge of legal personality
(c) Apply law of contract and tort in various scenarios
(d) Apply general principles of business law in practice
INDICATIVE CONTENT
Elements of the Legal System Nature, purpose and classification of law
Meaning of law
Nature of law
Purpose of law
Classification of law
Law and morality
Sources of law
The Constitution
Legislation
Substance of common law and doctrines of equity
African customary law
Islamic law
Judicial precedent
General rules of international law and ratified treaties
Administrative law
Meaning of administrative law
Functions of administrative laws
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Doctrine of separation of powers
Principles of natural justice
Judicial control of the Executive
The court system
Establishment, structure, composition and jurisdiction of courts
Supreme Court
Court of Appeal
High Court
Magistrates Court
Circuit Court
Alternative dispute resolutions
Nature of alternative dispute resolutions (ADR)
General principles of ADR
Mediation
Negotiation
Conciliation
Law of persons
Natural persons
Nationality, citizenship and domicile
Artificial person
Unincorporated associations
Incorporate associations
Co-operative societies Law of tort
Nature of tort
General defences of tort
Negligence
Vicarious liability
Strict Liability
Defamation
Limitation of actions
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Law of contract
Definition of contract
Classification of contracts
Essentials of a valid contract
Terms of a contract
Vitiating factors
Illegal contracts
Discharge of contract
Remedies for breach of a contract
Limitation of actions Sale of goods
Nature of the contract
Formalities of the contract
Terms of the contract
Implied terms by statute
Rights and duties of the parties
Auction sales
International contracts of sale: FAS, FOB, CIF, FCA, CPT, CIP, DAT, DAP, DDP, CFR, DAF, DDU, Ex-works and Ex-ship
Hire Purchase Contracts
Nature of the hire purchase contract
Difference between hire purchase and conditional sale/credit sale
Formalities of the hire purchase contract
Implied Terms of the hire purchase contract
Rights and duties of the parties
Termination and completion of the hire purchase contract Agency
Meaning and nature of the agency contract
Types of agents
Creation of agency
Authority of an agent
Rights and duties of the parties
Termination of agency
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Partnership
Nature of partnership
Types of partnerships
Rights, duties and liabilities of existing, incoming and minor partners
Management of partnerships.
Dissolution of partnerships and its consequences Indemnity and Guarantees
Nature of the contracts
Rights and duties of the parties
Termination of the contract.
Remedies for breach of contract Insurance
Nature of the contract
Formalities of the contract
Principles of insurance
Types of insurance
Termination of the contract Negotiable Instruments
Nature and characteristics
Negotiability of the instrument
Types: cheques, promissory notes, bills of exchange
obligations of the parties The Law of Property
Definition of property
Classification of property (real and personal, movable and immovable, tangible and intangible)
Property in land: private, public and community land
Interests in land: estates, servitudes and encumbrances
Intellectual property: plant breeder’s patents, trademarks, copyrights and industrial designs
Emerging issues and trend
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SUBJECT NO.5 MANAGEMENT INFORMATION SYSTEMS GENERAL OBJECTIVE This subject is intended to equip the candidate with knowledge, skills and
attitudes that will enable him/her to apply information systems effectively in
solving business problems and decision making.
LEARNING OUTCOMES A candidate who passes this subject should be able to: (a) Investigate on existing technologies about software and hardware to solve
problems
(b) Display proficiency in decision making using contemporary Information systems tools
(c) Apply the principles of information systems development
(d) Use various information systems in an organisation
(e) Apply the knowledge of information systems for competitive advantage
(f) Use data communication networks, the Internet and e-commerce in optimising business opportunities
(g) Implement information systems’ governance and risk management principles in business
(h) Implement information systems legal, ethical and social issues INDICATIVE COURSE CONTENT
Introduction to information communication technology (ICT)
Overview of ICT
Introduction to computer systems
Computer hardware
Computer software
Programming languages and tools
Information systems personnel and hierarchy
Role of ICT in business environments
Information centres
Impact of ICT in business
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ICT governance
Corporate governance and ICT governance
Policies and procedures
ICT management practices
Monitoring of controls and risks
Impact on ICT compliance with professional standards and codes Systems development
General systems theory
Role of management in systems development
Systems development approaches
Systems development life cycle (SDLC)
Rapid Applications Development (RAD)
Systems development constraints Information systems in an enterprise
Overview of Information Systems
Components of an information system
Types and characteristics of information systems
Systems in a functional perspective
Enterprise applications and the business process integration
Management information systems resources Legal, ethical and social issues in management information systems
Management information systems ethical and social concerns
The moral dimension of management information systems
The legal issues in management information systems
Emerging issues and trends
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LEVEL II (SKILLS)
SUBJECT NO. 6 CREDIT MANAGEMENT-LENDING
GENERAL OBJECTIVE
This subject is intended to equip the candidate with the knowledge, skills and
attitudes required for the administration for credit in the financial sector.
LEARNING OUTCOMES:
A candidate who passes this subject should be able to: (a) Undertake credit administration duties and responsibilities in financial
institutions
(b) Align credit assessments in conformity to laid down policies, procedures and practices
(c) Assess the impact of lending in promoting business enterprises in the economy.
INDCATIVE COURSE CONTENT
Introduction to credit administration
Identifying the credit opportunity
The credit processes
Identifying the credit opportunity
Credit evaluation
Credit decision making
Credit monitoring
The credit analysis process
The five Cs of credit
The credit analysis path Securities
Definitions
Secured and unsecured debts
Features of a good security
Types of securities
Taking and perfection of securities
Documentation of securities
Lodging and discharging of securities
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Credit facilities
Introduction
Funded and non-funded securities
Management of overdrafts
Structuring of credit facilities (Loans and advances) Credit cards
Definitions (credit and debit cards)
Importance of credit cards
Parties to credit card transactions
Main features of credit cards
Types of credit cards
Assessment and appraisal of credit card applications
Managing credit cards’ fraud
Credit cards’ risk management
Delinquency management Asset finance and leasing
Overview of asset finance
Types of asset finance
Assessment and management of asset finance risks
Choosing the right type of asset finance
Definition of leasing
Types of lease
Merits and demerits of lease
The leasing processes
Assessment and appraisal of leasing applications
Marketing and leasing
Leasing risks management Hire Purchase
Overview of hire purchase
Formation of a hire purchase contract
Duties and rights of parties to a hire purchase contract
Termination of hire purchase contracts
Advertising for hire purchase
Hire purchase risk management
Types and products of mortgage
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Introduction to mortgage
Types of mortgages
Parties to a mortgage transaction
Products offered under mortgage
Target customers and mortgage financiers
Analysing mortgage application propositions
Types of documents and registration process
Risk management and recovery Microfinance institutions (MFIs)
Introduction to microfinance
Distinction between microfinance and microcredit
Formulation of policies and procedures
Recruitment and retention of clients
The process of savings and lending in MFI(s)
Loan portfolio management
Risk management in MFIs
Role of regulatory authorities in MFI(s) Cooperative societies
Types of cooperatives
Cooperative principles and practice of cooperatives
Products offered by cooperatives
Structures and management of cooperatives
The process of saving and lending in cooperatives
Risk management
Delinquency management
The future of cooperatives
Role of regulatory authorities Emerging issues and trends
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SUBJECT NO.7 BUSINESS ENVIRONMENT
GENERAL OBJECTIVE
This paper is intended to equip the candidates with knowledge and tool that
would enable him/her to appreciate the function of organisations, organisational
management, marketing and the external environment such as the economy and
markets
LEARNING OUTCOMES
A candidate who passes this subject should be able to:
(a) Describe different types of business organisation.
(b) Assess factors which prompt change in organisations. (c) Describe how management influences the operation of business
organisations.
(d) Identify factors which facilitate team working.
(e) Identify the marketing mix in different
(f) Explain the product life cycle.
(g) Describe how supply and demand affects business activity.
(h) Describe the business cycle.
(i) Identify government policies to manage the economy.
(j) Explain how government policies influence the business environment.
(k) Explain the role of market segmentation and its implication for new
product development and modification.
INDICATIVE COURSE CONTENT
1. The economy
The Ghanaian economy
Nature of industry
Employment patterns and population trends in the Ghana
2. The organisation
Types of business organisation
Organisational objectives
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Stakeholders
Growth and development and change in organisation
PESTEL analysis
3. Organisational management
Management and leadership
Groups and teams within the organisation
Motivation and job satisfaction
Communication in organisations
Communication system
4. The market environment
Marketing management
Elements of marketing
The product life cycle
Promotion
Pricing strategies
5. The competitive environment
Market structures and behaviour
Costs and economies of scale
Supply, demand and pricing
Determination of exchange rates
Elasticity
Effects of government intervention and regulation
6. The macro-economic influences on the organisation
Circular flow of income
The business cycle and the multiplier
Economic growth
Inflation and deflation
Unemployment
Government economic policies and their effects
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SUBJECT NO. 8 EXPORT/INTERNATIONAL CREDIT
GENERAL OBJECTIVE
This subject is intended to equip the candidate with the knowledge, skills and
attitude that will enable him/her to apply to concepts, systems and techniques
of export/international credit
LEARNING OUTCOMES
A candidate who subject this subject should be able to:
(e) Apply the principles of credit management within global business
environment
(f) Assess and control risk associated with credit provision in
export/international business
(g) Understand different documents and systems used for
export/international credit
(h) Perform debt collections in export/international business
INDICATIVE COURSE CONTENT
Introduction
Working capital
Types and characteristics of customers sole traders, partnerships, limited companies
Relevant cultural differences of customers in the export/international market.
Financial advantages and disadvantages of granting credit to different types of customers.
Types of credit agreements.
Advantages and disadvantages of credit agreements to the credit supplier and the customer.
International Commercial Terms (INCOTERMS)
EXW Ex-Works
FAS – Free Alongside Ship
FOB– Free on Board -
CFR – Cost and Freight
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CIF – Cost insurance Freight
CIP Carriage and Insurance Paid
DDP – Delivered Duty Paid
Payment Terms and Methods
Payment in advanced
Bills of Exchange
Bills of Collection
Documentary credit
Documentary collection
Open account trading
Promissory note
Cheques
Banker’s draft
Bank transfer
SWIFT
International Money Oder
Bonds and guarantees
Export/International Transport Documents
Export Invoice
Bill of Lading
CRM
CIF
Airway /Seaway Bill
Certificate of origin
Credit Risk Control
Risk assessment and control
Information sources and their value
Scoring
Insurance
Collections Methods and Legal Action
Targets and use of resources
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Methods
Dealing with problems
Legal procedures and use of third parties
Money Laundering Regulations
SUBJECT NO.9 LAW GOVERNING CREDIT PRACTICE
GENERAL OBJECTIVE
This subject is intended to equip the candidate with the knowledge, skills and
attitudes that will enable him/her to apply principles of credit law in an
organisation.
LEARNING OUTCOMES
A candidate who passes this subject should be able to:
(a) Identify the securities available in lending
(b) Comply with the procedures and methods of creation of securities
(c) Identify the rights and duties of lenders and borrowers
(d) Demonstrate knowledge of Bankruptcy and Insolvency Law.
INDICATIVE COURSE CONTENT
Introduction to securities
Meaning of a security
Types of securities
Advantages and disadvantages of collateral
Formation of the contract
Qualities of a good security
Enforcement and perfection of securities Land as security
Meaning of land
Land tenure: freehold and leasehold
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Advantages and disadvantages of land as security
Creation of charges and mortgages
Procedure for perfecting title to land as security
Rights and duties of the parties to a charge and mortgage
Remedies
Release of security Intellectual property as collateral
Meaning of intellectual property
Types of intellectual property
Procedures for perfecting a security interest in intellectual property
Advantages and disadvantages of using intellectual property as collateral.
Rights and duties of the parties
Remedies
Discharge of security Chattel securities
Meaning of a chattel
Creation of chattel mortgages
Parties to a contract of chattel mortgage
Rights and duties of the parties
Remedies
Discharge Guarantees and Indemnities
Meaning and characteristics
Formation
Rights and duties of the parties
Common clauses in guarantee and indemnity
Termination of guarantees and indemnity
Advantages and disadvantages of guarantees and indemnities Bailment, pledge and lien
Meaning and characteristics
Formation, rights and duties of the parties
Remedies for breach, termination
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Corporate securities
Meaning and characteristics
Debentures
Charges
Remedies of a debenture holder
Shares and corporate bonds
Common clauses in corporate bonds Government borrowing
Treasury bills
Treasury bonds
Borrowing by County Government Regulatory Framework for lending institutions (excluding banks)
Co-operative societies
Savings and Loans companies
Micro finance institutions
Mobile money transfer services industry
Prudential Guidelines for lending Institutions Corporate governance
Meaning of corporate governance
Importance of corporate governance
Principles of corporate governance
Best practice in corporate governance
Role of Stakeholders (Shareholders, Board of Directors, Government)
Conflict of interest
Investor education and protection of shareholders
Consumer Protection in Credit Agreements
Credit card agreement
Disclosure
Unauthorised charges
Insurance
Correcting of errors
Deferral of payments
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Default charges
Prepayment Emerging issues and trends
SUBJECT NO. 10 PRINCIPLES OF ACCOUNTING GENERAL OBJECTIVE
This subject is intended to equip the candidate with knowledge, skills and
attitudes that will enable him/her to prepare and interpret financial statements
for different entities.
LEARNING OUTCOMES
A candidate who passes this subject should be able to:
(a) Prepare books of original entry and basic ledger accounts under double
entry system
(b) Prepare basic financial statements of sole traders, partnerships, companies
and manufacturing entities and not for profit organisations
(c) Comply with the regulatory framework in the accounting field
(d) Account for assets and liabilities
(e) Analyse financial statements by use of ratios and statement of cash flows.
INDICATIVE COURSE CONTENT
Accounting principles and techniques
• Reasons for keeping accounts
• Account, ledger and transaction types
• The accounting equation
• Rules of double entry, cash and credit transactions, VAT, and discounts
• Use of control accounts to ensure ledger accuracy.
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Trial balance and financial statements
• Trial balances as platform for financial statements.
• Error correction, undetected errors and suspense account.
• Statements: Income, Financial Position and Retained Earnings
Reconciliation.
• Adjustments to monetary values (incl. accrued/prepaid items,
depreciation, bad debts, allowance for doubtful debt)
• Concepts, conventions and accounting standards.
Differences in financial reporting
• Sole trader and micro, small, medium, and large company reporting.
• Regulatory/legal requirements (FRS/Ghana Companies Act)
• Company report content by management and auditors.
• Relative usefulness to credit managers.
Budgetary control
• Budgetary control process.
• Different budget types
• Cash budgets and relevance
• Variance analysis
Business performance
Working capital
Cash operating cycle
Ratio calculation and meaning
Business performance measurement
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SUBJECT NO. 11 TRADE CREDIT MANAGEMENT
GENERAL OBJECTIVE
This subject is intended to equip the candidate with the knowledge, skills and
attitude that will enable him/her to apply to concepts, systems and techniques
of trade credit environment.
LEARNING OUTCOMES
A candidate who passes this subject should be able to:
(a) Apply the principles of credit management within business environment
(b) Assess and control risk associated with the provision of trade credit by
selecting appropriate payment terms and methods of payment.
(c) Understand different documents and systems used for trade credit
(d) Apply collection and recovery methods and strategies
(e) Draft a credit policy and procedural manual.
(f) Measures credit management performance and sets targets in an
organisation.
Introduction to trade credit
Definition of credit
Cost of credit
The credit department
Credit policy
Financial advantages and disadvantages of granting credit to different types of customers.
Credit Agreement and Payment Terms
Credit Sale
Hire Purchase
Conditional sale agreement
Letters of credit
Promissory note
Cheques
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Banker’s draft
Bank transfer
Bank guarantees
Credit risk control
Risk assessment and control
Information sources and their value
Scoring
Insurance Sales Ledger Administration
Importance and interpretation of sales ledger
Administration of sales ledger
Sales ledger format
Statements
Accounts queries
Order vetting
Sales ledger control
Collections methods and legal action
Targets and use of resources
Methods
Dealing with problems
Legal procedures and use of third parties
Money Laundering Regulations
PAPER NO.9 ADVANCED CORPORATE LENDING
GENERAL OBJECTIVE
This subject is intended to equip the candidate with the knowledge, skills and
attitude that will enable him/her to manage the lending function
LEARNING OUTCOMES
A candidate who subject this paper should be able to:
Assess the creditworthiness of corporate customers
Identify various risks associated with collateral
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Assess and manage credit risk
Apply canons of lending in evaluating corporate customers
Monitor and control lending
Comply with professional ethics applicable in corporate lending
INDICATIVE COURSE CONTENT
An overview of corporate lending & a framework for business strategy and
financial analysis
Review and analysis of principal corporate lending criteria
Analysis of risks associated with specific types of organisation
Evaluation of supply chain operations and impact on operational cash-
flow needs
Analysis of business strategy and its relationship with finance
Advanced application of practical tools application including analysis
of earnings quality, earnings management and free cash-flow analysis
Evaluation of how financial statement information captures and reflects
the critical success factors of risk in the competitive environment and
strategy of firms
Financial risk and cash-flow drivers
The importance of cash-flow measurement and the flaws of using
traditional accounting performance measures
The nature of ‘free cash flow’, the principal cash-flow drivers, and the
relationship with value creation
Using ratios as a working tool and setting guidelines for key ratios
Understanding cash flow and what it reveals
Calculating free cash flow and its relevance
The importance of positive working capital and the trading cycle
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Shareholder value and valuation/ debt structure and capacity
the development of ‘shareholder value’
Techniques of company valuation
Valuations using various traditional methods
Valuation as a tool for credit analysis and its relevance
Analysis of capital structure, the debt versus equity debate and the
nature of the ‘cost of capital’
Application and evaluation of alternative approaches to assessing
payback through reliability and quality of earnings, earnings
generation, repayment capability and the underlying risks for lending
bankers
Critique and evaluation of techniques with respect to empirical
evidence
Analysis of risk exposures
This section identifies and analyses the nature of the underlying risks
associated with corporate relations and alternative lending propositions.
The relative importance and propensity of these risk (both financial and
financial) are examined in light of empirical evidence. Such risks include:
credit risks, operational risks, financial risks, market risks, reputational
risks, regulatory and environmental risks
Structuring and Presentation of Facilities/ Monitoring and Assessing
Analysis the need for finance
Development and justification of suitable alternatives involving
different terms and products (including cash flow lending, venture
capital/equity-types funding etc.)
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Evaluation of alternative finance solutions and alignment of risk/return
models
Portfolio management, reviews and analysis
Internal inspections and reviews –managing the process
Understanding and appreciating the different types of security
Warning signs and how to manage them
Documentation
Discuss documentation considerations to align with facility structure
and underlying risks
Managing documentation issues, covenants, both financial and non-
financial, and reporting requirements with reference to industry
differences
The assessment of collateral and calculating a range of their recovery
prospects to evaluate suitable security options
Prudential guidelines in lending
Introduction
Reasons for prudential guidelines
Non-performing loans
Non-performing overdraft
Risk classification of debt
Management of non-performing debts
Provisioning requirements
Renegotiated standard loans
Multiple facilities
Renegotiated doubtful loans
Write offs
Treatments of securities
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Insider borrowing
Credit crunch
Definition of credit crunch
Causes of credit crunch
Effects to the business environment and the economy
Managing risk under credit crunch
Ethics in corporate lending
Standards of conduct and personal integrity
PAPER NO.13 ADVANCED CORPORATE LENDING
GOVERNANCE, RISK AND ETHICS
GENERAL OBJECTIVE
This subject is intended to equip the candidate with knowledge, skills and
attitudes that will enable him/her to exercise professional judgement in carrying
out the role of the credit manager relating to governance, internal control,
compliance and the management of risk within an organisation, in the context of
an overall ethical framework.
LEARNING OUTCOMES
A candidate who passes this subject should be able to:
Define governance and explain its function in the effective management
and control of organisations and of the resources for which they are
accountable
Evaluate the Professional Accountant’s role in internal control, review and
compliance
Explain the role of the accountant in identifying and assessing risk
Explain and evaluate the role of the accountant in controlling and
mitigating risk
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Demonstrate the application of professional values and judgement through
an ethical framework that is in the best interests of society and the
profession, in compliance with relevant professional codes, laws and
regulations.
INDICATIVE COURSE CONTENT
Governance and responsibility
The scope of governance
Agency relationships and theories
The board of directors
Board committees
Directors’ remuneration
Different approaches to corporate governance
Corporate governance and corporate social responsibility
Governance: reporting and disclosure
Public sector governance
Internal control and review
Management control systems in corporate governance
Internal control, audit and compliance in corporate governance
Internal control and reporting
Management information in audit and internal control
Identifying and assessing risk
Risk and the risk management process
Categories of risk
Identification, assessment and measurement of risk
Controlling risk
Targeting and monitoring risk
Methods of controlling and reducing risk
Risk avoidance, retention and modelling
Professional values, ethics and social responsibility
Ethical theories
Different approaches to ethics and social responsibility
Professions and the public interest
Professional practice and codes of ethics
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Conflicts of interest and the consequences of unethical behaviour
Ethical characteristics of professionalism
Social and environmental issues in the conduct of business and of ethical
behaviour
SUBJECT NO.14 PROCESS IMPROVEMENT
GENERAL OBJECTIVE
This subject is intended to equip the candidate with advanced knowledge, skill
and attitude that will enable him/her to monitor, review and improve business
processes in own area of responsibility
LEARNING OUTCOMES
A candidate who passes this subject should be able to:
Use appropriate measures to monitor and assess business processes in
own area of responsibility.
Work with relevant stakeholders to monitor how business processes
affect the quality of work in the department.
Devise a plan for suggested improvements in response to the business
process monitoring undertaken.
Use appropriate measures to check the validity of the plan of
improvement.
Take corrective action and revise plans where necessary.
Prepare a business plan for the implementation of proposed process
improvements.
Develop measures to test the impact of the change to business processes.
INDICATIVE CONTENT
Benefits and potential difficulties associated with business process
management
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Lean Six Sigma, Streamlined Process Improvement (SPI) and Continuous
Improvement
methodologies
Use of tools and techniques to identify areas for improvement including
value stream
Mapping, statistical process control and the DMAIC problem solving
process.
Critical business processes and preliminary boundaries
Creation of process improvement team and project plan including
reporting
Mapping and documenting current business processes including
employee observations
and process walk-through
Cost, cycle time and output analysis
Remove non-value-adding process steps through leaning, cleaning and
greening
Selecting best-value future-state solutions
Validation and verification of changed process.
In-process measurement and feedback systems
Implementation plans including change effect measurements and
continuous
improvement, with consideration of the implementation, review and
communication of
strategy
SWOT construction and analysis.
SUBJECT NO. 15 DEBT RECOVERY PROCEDURE AND PRACTICE
GENERAL OBJECTIVE
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This paper is intended to equip the candidate with the knowledge, skills and
attitudes that will enable him/her to undertake debt recovery procedures in
accordance with the law.
LEARNING OUTCOMES
A candidate who passes this subject should be able to:
Evaluate the viability of recovering debts through legal proceedings
Comply with the procedures for recovery of debts through legal
proceeding
Analyse the alternative models of debt recovery
Apply knowledge of insolvency law in an international perspective.
INDICATIVE COURSE CONTENT
Debt and borrowing
Meaning of debt
Types of debt
Importance of borrowing
Debt instruments
Creditors and debtors’ rights
Debt collection options
Debt protection
Meaning of debt protection
Alternatives to debt protection
Debt protection insurance
Distinction between debt protection insurance and credit insurance
Debt management
Meaning of debt management
Types of debt management
Rescheduling debt
Extension of time
Foreclosure
Conversion of debt to equity
Payment of interest first
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Suspended payments
Surrender of securities
Receivership
Preliminary considerations before initiating or defending debt
Recovery suits
Letters of demand
Capacity to sue
Mediation
Acknowledgement of debt
Evidence of indebtness
Statute barred debts
Viability of debt recovery
Availability of the debtor
Enforcement and execution
Debt recovery through legal suits Institution of suit
Locus standi
Jurisdiction
Pleadings
Service of summons Hearings
Summary judgment
Attachment before judgment
Presentation of evidence
Judgement and decree
Extraction of decree
Execution of decree
Attachment and sale of property
Attachment of debts
Garnishee orders
Alternative dispute resolution mechanisms
Negotiation
Conciliation
Meditation
Arbitration
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Bankruptcy
Meaning
Nature of bankruptcy
Alternatives to bankruptcy
Bankruptcy proceedings
Rights of creditors
Consequences of bankruptcy
Discharge of a bankrupt
Dissolution of partnership
Break-up of a partnership
Effects of break-up
Restriction of ceasing to be a partner on or after break-up
Protection of property acquired after break-up
Winding up by partners
Distribution of partners assets on winding up
Dissolution of a partnership which has broken up
Power of court to appoint administrator
Order appointing provisional liquidator
Power of court to fix remuneration of receivers and managers
Appointment of a receiver as liquidator
Provisions relating to receiver or manager appointed
Insolvency law
Meaning of insolvency
Receivership
Types of liquidation
Official receiver/liquidator
Committee inspection
Distribution of assets
United Nations Commission on International Trade Law (UNCITRAL) legislative guide on insolvency law
United Nations Commission on International Trade Law (UNCITRAL) model law on cross border insolvency
World Bank principles and guidelines for effective insolvency and creditors rights system.
Emerging issues and trends
SUBJECT NO.16 CREDIT PRACTICE
GENERAL OBJECTIVE
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This paper is intended to equip the candidate with the knowledge, skills and
attitudes required for the application of various credit management concepts in
a practical scenario.
LEARNING OUTCOMES
A candidate who passes this subject should be able to:
Demonstrate sound technical knowledge in credit management
Demonstrate diverse knowledge clearly applied in an analytical and
practical manner in solving the problems in a case study
Present appropriate alternate solutions in credit management and make
effective judgement in a logical and rational manner
Communicate effectively with realistic recommendations in a concise and
logical manner
Prepare a comprehensive credit report.
INDICATIVE COURSE CONTENT
Credit portfolio risk management
Definition of credit portfolio risk management
Pre and post credit disbursement risks
Measuring credit portfolio risk
Credit risk models
Credit enhancement methods
Credit portfolio segmentation and risk diversification
Identifying concentrations of risk
Evaluating and managing concentrations of risk
Concentration management techniques
Illustrative case studies on credit portfolio risk management
Regulatory requirements: minimum capital requirements
Basel capital adequacy framework for credit risk
Impact of changes to the Basel Capital Adequacy framework on credit risk
Key differences between regulatory capital (Under Basel framework) and economic capital
Uses of economic capital and economic value-added concepts in a bank
Relationship between shareholder, regulatory and economic capital
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Corporate failure and financial distress
Definition of financial distress
Indicators and early warning signs of corporate failure
Reasons of corporate failure
Use of statistical models in predicting corporate failure
Comparison of corporate failure prediction models
Strategies of Mitigating against Financial Distress and Corporate failure
Illustrative case studies on corporate failure and financial distress Working capital and credit management
Relationship between working capital cycle and credit management
Effects of credit terms on working capital management
Impact of credit policy on working capital management
Determination of working capital
Strategies of improving working capital
Illustrative case studies on working capital and credit management Delinquency management
Introduction to delinquency management
Causes of delinquency management
Delinquency classification
Effects of delinquency in credit portfolio
Work outs and restructuring
Negotiation and influencing
Dealing with problem loan accounts: nature of problems and
immediate action drill
Illustrative case studies on delinquency management Accounts receivables management information systems (MIS)
Case study on automation of receivables management function Case studies on:
Microfinance
Cooperatives
SME lending
Trade and export credit management
Credit policy
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Emerging Issues and trends
GENERAL GUIDELINES TRAINING
Students are required to participate in the training organize by the Institute.
ENTRY REQUIREMENT
The minimum qualification for admission to the Professional Certification
Programme is university degree or diploma from a tertiary institution.
Non-Credit Management, Banking & Finance degree students shall begin at
Level 1. Students shall have to clear all Level I & II papers through examination
or exemption before they can sit the examination for any Level III paper.
Students shall pass all subjects in the examination at one level before they can
proceed to write the examination at the next higher level.
EXEMPTION
A pass in any level I and II subjects in a university degree examination or its
equivalent by a recognised institution may qualify a candidate for exemption
from that subject.
An applicant with a B.Sc. (Administration) Credit Management/Banking &
Finance, Option or an MBA (Risk & Finance) or their equivalents may qualify for
exemption from level I and part of level II. Students who wish to be considered
shall apply for all exemptions sought for in levels I and part of II. Transcripts and
other supporting documents should be attached at the time of submitting
admission forms. No exemption at the Level III.
AWARDS
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A student who successfully completes all level II papers shall be awarded an
Associate membership certificate at a graduation ceremony and designated as
Chartered Credit Professional of the Institute.
EXAMINATION PERIOD
Examinations are held in January, June and November. There is no order for
selection of courses for examination registration; however, candidates are
expected to complete one level before proceeding to the next. Exams registration
opens in March for June diet, August for November diet and September for
January diet.
Pass Mark
Levels I, II and III
The pass mark for a Level I, II or Level III paper is an aggregate of Fifty percent
(50%) and the Professional Certification Board has satisfied itself that he/ she has
attained the required 3 years working experience in the Credit management and
its related field.
PROFESSIONAL CERTIFICATION BOARD
The Professional Certification Board (PCB) oversees the professional certification
programme.
The functions of the Board:
Reviews syllabuses to meet changing or current trends in HRM.
Approves resource persons for teaching course subjects.
Reviews examination questions submitted by lecturers.
Oversees the conduct, marking, and publication of examination results.
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Sets qualifications/criteria for studentship.
Approves applications for exemptions.
Vets course handouts against defined criteria
Considers appeals and complaints about examination results
Reviews and recommend action on examiners’ reports.
Submits periodic reports to the Council.
For more information and inquiries:
www.cicmgh.org
[email protected] / [email protected]
(00233) 0302951768/0244045254