James Cook University Subject Handbook - 2023

BX3135 - Credit and Lending Decisions

Subject Description

In this subject students will address concerns regarding how banks process credit and lending decisions. Topics include the basic building blocks of lending, examining the role of the intermediary and how banks overcome information Asymmetry - through transaction and relationship lending. It emphasises financial statement analysis of borrowers, both business and personal. The credit evaluation process is discussed and the credit scoring system explained. The different lending products of a bank and the purpose of each lending product are examined. Lending to small and medium sized enterprises (SMEs) as a driver of sustainable economic growth in the Asian Pacific region is highlighted.

Learning Outcomes

• Assess how banks make credit and lending decisions, including critical analysis of financial statements and the operation of credit scoring systems
• Appraise the influence of interest rates on economic growth and how monetary policy can influence bank lending
• Synthesise the macroeconomic role of lending to small and medium sized enterprises (SMEs) and economic development
• Analyse the challenges and developments of lending practices for SMEs
• Compare and contrast lending services including relationship banking, microfinance and alternative finance

Subject Assessment

• Written > Test/Quiz 1 - (15%) - Individual
• Written > Essay (including multi-draft) 1 - (40%) - Group
• Written > Technical report - (45%) - Individual

Note that minor variations might occur due to the continuous subject quality improvement process, and in case of minor variation(s) in assessment details, the Subject Outline represents the latest official information.

Availabilities