Credit Risk Analysis Simulation

In this single or multiplayer simulation, students act as credit analysts at a commercial bank. Their responsibilities include:

• Reviewing client financials, credit histories, and business models

• Conducting ratio analysis to assess risk

• Asking probing questions to clarify ambiguities in the borrower’s narrative

• Deciding whether to approve, reject, or conditionally structure a loan

• Setting repayment terms, covenants, and collateral requirements

• Justifying decisions to senior credit officers or investment committees

• Monitoring post-lending performance and identifying early warning signals

This simulation trains students to think like credit professionals under time pressure and imperfect information. Students learn how to:

• Apply credit analysis frameworks to real business cases

• Identify red flags in borrower data and qualitative disclosures

• Align lending decisions with institutional policy and risk appetite

• Structure loans to mitigate identified risks

• Communicate credit rationales clearly and confidently

• Evaluate evolving borrower performance and trigger responses when needed

• What background knowledge is required? Basic understanding of financial statements and ratios is recommended. No prior experience in credit or lending is necessary.

• Is this best for undergraduates or postgraduates? Both. The simulation can be calibrated in complexity - from introductory ratio analysis to advanced structuring and portfolio risk themes.

• How long does the simulation run? The simulation can be completed in 4 - 5 hours for a single round or extended over multiple sessions for deeper analysis and committee-style reviews.

• Can students work individually or in teams? It supports both formats. In team play, students role-play analysts, relationship managers, and risk officers.

• How are students assessed? Scoring is based on risk-adjusted return, default avoidance, covenant discipline, and clarity of justification presented to the committee.