To stem the tide of non-performing loans, the financial institution must begin to see the interface between the young officer and the customer like the one between the doctor and the patient or the lawyer and the client, in terms of the level of training, apprenticeship and expertise expected of the lending and relationship officer. Therefore, we advocate the scheme in which the lending manager works closely with the young lending officer, in credit analysis and relationship management, internally and externally, the way the master craftsman partners with his apprentice until he earns independence.

Our emphasis is on management trainees and junior and middle-management cadre who most frequently interface with customers and who process loan requests to which members of senior management, credit committees and Board of Directors, often, routinely assent.

There is an intensive, integrated, foundation module for those with non-business background. And every lending officer must demonstrate basic competence in the structure of the Nigerian economy and in macro-economic, micro-economic and financial statement analyses (including the analysis of his institution’s funding structure)

In the second module, the young lending officer is taken through case studies (with special reference to the historical bad loan portfolio of the bank) to appreciate both apparent and latent pitfalls in lending, particularly, those bordering on unethical conduct, inexhaustive appraisal, unbridled profit motive, speculation, incomplete documentation, hasty disbursement, company practices and monetary and fiscal policy changes. The third module deals with practical credit appraisal, starting with small enterprises and family businesses where he should watch out for incomplete accounting records and non-separation of business cashflow from personal cashflow; poor market definition; inadequate previous preparation (education, experience and skill gaps, relative to the proposed transaction) and paternalistic hiring, promotion and organization and governance practices that might be inimical to repayment. The fourth module deals with the ‘legal mind’, sense of anticipation and forecasting, executive supervision, mentoring and monitoring imperative for advancement to large exposures.

The fourth module deals with the various programmes of loan monitoring and loan recovery. The fifth and final module is on customer prospecting, closing of deals and general relationship management.