TUESDAY: 25 April 2023. Morning Paper. Time Allowed: 3 hours.
Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper.
QUESTION ONE
1. Distinguish between “Proportional Reinsurance” and “Non-Proportional Reinsurance”. (4 marks)
Outline FOUR contents of a credit insurance policy. (4 marks)
2. Highlight SIX disadvantages of recovering debts through the legal process. (6 marks)
3. Building and managing relationships is one of the most important skills that a credit manager can possess.
With reference to the above statement, discuss THREE ways that a credit manager could use to improve the relationship between credit department and sales department. (6 marks)
(Total: 20 marks)
QUESTION TWO
1. State FOUR attributes of successful debt collectors. (4 marks)
2. Describe FOUR steps for developing a non-performing loans strategy. (8 marks)
3. Discuss FOUR factors that a credit manager should consider when evaluating the performance of a debt collection agency. (8 marks)
(Total: 20 marks)
QUESTION THREE
1. Explain THREE benefits of engaging independent staff to manage loan recovery. (6 marks)
2. Describe THREE challenges faced by banks in the implementation of International Financial Reporting Standard (IFRS) 9. (6 marks)
3. Propose FOUR advantages of developing a workable debt repayment plan. (8 marks)
(Total: 20 marks)
QUESTION FOUR
1. Suggest THREE ways in which a credit manager could improve the Collection Effectiveness Index (CEI) as a measure of debt collection performance. (6 marks)
2. Collections involve at times visiting one’s debtors for negotiations.
With reference to the above statement, highlight SIX actions a debt collector should take prior to meeting a debtor. (6 marks)
3. Analyse FOUR services offered by a credit department to customers for enhanced customer relationships in the credit business. (8 marks)
(Total: 20 marks)
QUESTION FIVE
1. State FOUR rules that govern issue and service of summonses in civil suits for debt recovery. (8 marks)
2. Summarise SIX steps taken in making a debtors’ budget. (6 marks)
3. Explain the term “Garnishee order”. (2 marks)
Describe FOUR options available to a judgement debtor once a garnishee order has been issued.
(4 marks)
(Total: 20 marks)
