Certificate in Credit T10 – 5R Strategic Consultancy Sdn Bhd

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With reference to Diagram 1, which category of borrower can be recommended for approval?

PAYMENT HABITS	Good habit	A	B
	Bad habit	D	C
		Poor Ability	Good Ability
		CAPACITY TO REPAY

Category D

Category A

Category C

Category B

If you decide to recommend Category A for approval, which of the following strategy you may adopt?

Applicant to provide additional security

Lengthen the Loan Tenor

Reduce the Loan Amount

Shorten the Loan Tenor

Which of the following Credit Risk management Framework is deemed to be more useful and relevant for Consumer Lending?

The Scope of Credit Risk Assessment Framework

The RAAC Framework

The 5C's Framework

The CAMPARI Framework

Which of the following is NOT the components of the 5C's Framework?

I. Competency
II. Capacity
III. Capability
IV. Capital
V. Collateral

I only

I and III only

I, II and III only

I, IV and V only

Character in business lending refer to

Willingness to pay of individual borrowers, companies as well as organisations

Willingness to pay of a single person or individual borrower

Ability to pay of individual borrower, companies and organisations

Good values of integrity and responsibility of the borrower

Which of the following are common management style?

I. Aggressive
II. Speculative
III. Prudent
IV. Conservative

II and IV

All the above

I, II and III

I and III

Which of the following are common management lifestyle?

I. Aggressive
II. Prudent
III. Thrifty
IV. Extravagant

III and IV

II and III

I and II

I and IV

Condition is one of the component in the 5C's Framework, refer to as

The current economic environment that might affect the repayment capability of the borrower.

External environment that exists when the request for credit facilities is made

Economic Cycle, Business Cycle and Product Life Cycle

Future economic conditions that can influence the capacity to pay the loan

The following are phases against time of Product Life Cycle in sequence

Sunrise, Sunshine and Sunset

Recovery, Boom, Optimism of Boom and Trough

ash Cow, Star, Question Mark and Dog

New Start-up, Growth, Maturity and Decline

Which is the feature of Maturity Phase in the Industry Life Cycle?

Competitors leave the industry and force to close shop

More competitors overcrowd the industry and profit margin drops

Proven and markets are established

Industry is clearly viable and making good progress with strong profit

Capacity in the 5C's Framework refer to

Assessment of the business and sales potential using financial forecast

Business efficiency to generate future cash flow for debt repayment

Willingness to pay future loan installments

Assessment on the ability of the management to run the business

In business, which of the following are measurement of the Financial Commitment?

I. Capital
II. Shareholders Fund
III. Subordinated Loans
IV. Third party collateral

All the above

II, III and IV

III and IV

I and II

Which of the followings statement is true in Business Lending?

Lending bank should take both credit risk and equity risk

Borrower should take both business risk and credit risk

Borrower should take credit risk but not equity risk

Lending bank is only willing to take credit risk but not business risk

What is the main purpose taking collateral as security in lending?

To mitigate default risk

To comply with Principle of Good First Way and Second Way Out

To enforce legal action

To persuade the borrower to rectify any missed obligations quickly

Select the statement which completely reflect the CAMPARI Model

Character, Ability, Margin, Purpose, Amount, Repayment, Insurance

Capital, Amount, Management, Product, Ability, Repayment, Insurance

Character, Margin,, Purpose, Ability, Amount, Repayment, Insurance

Character, Ability, Margin, Purpose, Assurance, Repayment, Installment

One of the following factors is NOT related to Character in CAMPARI Framework

Stability and durations of employment

Clients credit history

External factors affecting repayment ability

professional status and reputation

One of the following factors is not covered under Insurance in the CAMPARI method of Credit Evaluation

Net Value of Assets

Fire Insurance

Life Insurance

Collateral

Which of the following components of CAMPARI measure the financial commitment of the borrower?

Repayment

Amount

Character

Margin

What is the common basis used to evaluate the amount of loan in Consumer Lending?

Banks requirement for borrower to show commitment

Based on the need of the borrower as well as his or her capacity to pay

90% of the purchase price of the assets

Based on the need of the borrower

Which CAMPARI element reviews the borrower's justification for the financing?

Amount

Purpose

Margin

Ability

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