5 Cs & Beyond : Differential approach to Credit

I was introduced to this book “5Cs & Beyond” by my Colleague who is a Credit Analyst of a leading Indian Bank. Thanks to him.The name of the book rightly justifies its content. “Written in a Very Simple Language, Easy to understand phrases avoiding technical jargons”…… … This book is one step ahead of the so called conventional credit underwriting. Explaining the behavioral as well as Managerial traits expected from a Credit Manager, this book is a Must read for all the banking professionals, irrespective of whether into “CREDIT” or Not as we all cumulatively serves the interest of our stake holders.“5Cs & Beyond” well explains the accumulated knowledge of the author through examples like how the “New Testament” is explained through parables.Adding the 6th C- “Compliance” to the 5Cs in evaluating the Credit Worthiness, Initiatives towards monitoring of the on boarded accounts, Acceptability of the innovations introduced to the process of underwriting for Better TAT and Timely service to the customer etc has brought my knowledge a bit up which was more or less restricted to either “I recommend the facility proposed to M/s.XYZ basis…..and subject to ..…” OR “Not comfortable basis……MUST READ FOR ALL

Very easy reading about credit dos and don'ts...giving a very practical insight into day to day credit related decision making in the commercial and wholesale lending businesses. It's a must read for all Corporate and SME Bankers.

Approach is unique and practical oriented. Lot of live situations covered in chapters which are interesting and informative. Concise and pithy. The five Cs of credit underwriting is not to be jettisoned but to be supplemented with the issues discussed in the book. Discussion on improving internal audit efficacy, role of reporting to Board / ACB, repeated audit remarks, resolving conflicts of interests between internal audit and business, credit processes, etc. would further enhance the value of the book.

Awesome book! Wonderful Practical Guide, a great Handbook and a ready reference for Banking professionals and even for other industry professionals! A good read for clear understanding. Practical concepts explained are really impressive!

Very practical approach devoid of jargons. Must read for credit analysts.

Its wonderful book, skill enhancer, easy to understand, beyond credit.

Nice book for beginners and professionals alike. The book covers various aspects of credit assessment, monitoring and management which otherwise are not taught elsewhere.Recommended for people from finance, banking and mainstream industry . Every chapter is sum total of practical experience.

At the outset let me tell everyone that I had purchased this book with the expectation that the book would provide a different perspective on credit appraisal, but found the book to be extremely disappointing.Before I proceed, let me tell you all that there are two types of authors, who have written book on credit and credit analysis. First category is of those authors who have not worked in bank but can write good theocratical books. Second category belongs to those, who have worked in credit role. It has been seen that they try to present their thoughts on how credit works, but often fail to do this. The book “ 5Cs and Beyond” falls in second category. Let me explain this in detail.Let us start with first chapter “Understanding Business”. The author talks about significance/role of understanding business in credit decision making. He talks about Porter’s Five Force Model, which can be used to analyse industry. Unfortunately, the world of business has moved much beyond Porter’s model. We have complex and innovative businesses being formed these days which cannot be analysed using Porter’s model. Unfortunately, most of the authors continue to use their learnings of college days to share that in books that they write.The author has taken convenient data points related to Income Statement and Balance Sheet in the book to explain different situations. If you are given one Credit Appraisal Memorandum of a bank in real life, you will not be able to make out anything after reading this book. Real world examples are very complex and extremely challenging to analyse. The intrinsic factors mentioned by the author can be used in equity analysis and not in credit analysis. This is a huge flaw of this book.The author talks about risks in lending but has no relevant example to share on these risks. He could have taken one example to show a robust credit appraisal can fail when external factors turn against a business or company. For example, depreciation of currency had very bad impact on coal prices in early 2010 in India, which impacted steel industries in India and caused many of them face real business challenges.There are many other flaws in the book and hence it is a must avoid.