credit risk

"The banking crisis has caused a ripple effect throughout the global economy. Its consequences for businesses have been unprecedented. It has never been more important to have the support and guidance of a team of experts who work in partnership with a business to assist in managing and tracking customer credit risk."

Businesses will always need to manage customer credit risk. The difference now is that there is no room for error – there is less chance you will recover from poor decisions.

The credit crunch has dramatically highlighted the fundamental flaws in businesses operating without transparent credit data around acceptable asset exposure limits. You need to put foolproof measures in place to protect balance sheets from overexposure to credit risk – to take the risk out of credit risk. 

You need to:

  • Know what impact the recession will have on your customers' credit risk and the resulting effect on your balance sheet.
  • Identify those customers that will move from being an acceptable risk to being high risk.
  • Have a strategy for each customer group to minimise the impact of the recession and maintain sound levels of credit extension.

 

gg management consulting (gg) develops specific targeted customer strategies to address the recession and manage your balance sheet exposure with greater certainty using the unique Silurian* Credit Risk Model.

Credit risk has three elements:blueline.jpeg

CREDIT EXTENSION: The size of the customer's obligation.blueline.jpeg

CREDIT QUALITY: The customer's ability to deliver on that obligation.blueline.jpeg

CREDIT EXPOSURE: The obligation outstanding x the probability of default.blueline.jpeg

  • Do you know whether your customers are creditworthy?
  • Can you predict when an individual credit customer will go from star performer 
    to failure?

These are critical questions for any business, especially during times of tight liquidity when the criteria for approving credit are changing. As it becomes harder to raise funds, surviving in a recession means businesses need stronger liquidity positions.

Right now, cash is king.

*The term 'Silurian' refers to the geologic period when the distinct bedrock that supports the earth's surface was laid down. It is used by ggmanagement consulting to characterise its models, which provide a solid foundation on which client organisations can build their businesses.


Ask for a free consultation. If our models are likely to provide positive results for you and we are engaged, we will guarantee you will increase your profits by far more than you invest in the programme.


Contact us now on 0845 6435 838 or email: contact@ggmanagementconsulting.com


We look forward to discussing your needs.