Five Steps to a Stronger Credit Culture

Creating a credit culture is an evolutionary process requiring periodic review and enforcement. A financial institution can take 5 steps to revive its credit culture: 1. Make credit quality a strategic objective. 2. Appoint a chief credit officer, and encourage open communication about credit issues...

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Bibliographic Details
Published in:Commercial lending review 1992-04, Vol.7 (2), p.3
Main Authors: Barr, Ann, McWhorter, R P
Format: Article
Language:English
Subjects:
Accountability
Banks
Collateral
Commercial Lending Officers
Communication
Competitive advantage
Corporate Credit Services
Corporate culture
Corporate objectives
Credit
Credit management
Credit policy
Employees
Financial institutions
Guidelines
How-to
Implementations
Incentive plans
Loan Policies
Loan review
Management training
Marketing
Officer Training
Officers
Performance appraisal
Performance evaluation
Quality management
Retail Credit Services
Training
Trends
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Summary:Creating a credit culture is an evolutionary process requiring periodic review and enforcement. A financial institution can take 5 steps to revive its credit culture: 1. Make credit quality a strategic objective. 2. Appoint a chief credit officer, and encourage open communication about credit issues. 3. Strengthen credit policies and procedures by, for example, requiring that exceptions to policy be infrequent, properly justified, and carefully documented. 4. Train lending officers to identify and address important credit issues, and establish credit training as a continuous process. 5. Establish responsibility and accountability. Once the building blocks of a sound and prudent credit culture are in place, continued success depends on a board of directors, senior managers, and stockholders who endorse and enforce the new culture.
ISSN:0886-8204