1. Introduction
Whenever a lender is exposed to loss from
a borrower who fails to honor their
contracted obligations in a timely manner,
credit risk arises.
For lenders, risk is inherent in all their
business activities and products or services
they provide
Risk level could be different in different
products. All of these risks needs to be
understand in a way, that how they will
effect the overall credit portfolio.

2. Managing the risk, that prevails in debt
services require a systematic framework to be
established throughout the relevant credit
areas; this is known as credit process.
This chapter presents an overview of the
whole credit process
Then we will discuss each function of credit
process in detail, that how it impacts the over

3. • Risk associated with delivering credit can result in
direct and indirect losses if handled inadequately.
by the staff member
• Like manufacturing sector, credit distribution
sector has a complete process of distributing
credit to borrowers.
• In order to understand the credit risk
management process, we have need to
understand the market environment first, around
which credit risk management process has been
evolved.