Credit management in banks
Document that provides the essential financial and other information about the borrower on
which the lender bases the decision to lend. For a business loan, it normally requires a detailed
business plan that includes current and projected (usually for 3 years, or for the period of the
loan) income statement (profit and loss account), balance sheet, and cash flow statement. The
applicant firm must specify the loan amount and purpose, period and means of repayment, and
guaranties and/or collateral offered. For consumer loans, banks generally use standard forms for
the applicant to fill-in the information. A loan application entails neither a pledge by the
applicant nor a commitment by the lender. Also called credit application.
Loan Application Process
Stage 1: Loan applications from applicants in eligible countries (i.e. with less than 10 registered
CDM activities at the time of application) will go through initial screening as first step. This will
include a) review of basic eligibility criteria and b) basic due diligence on the applicant. It will
also include screening of the proposed CDM consultant. UNOPS/UNEP DTU may not process
applications if the proposed CDM consultant does not meet the basic eligibility criteria. In such
cases, the loan applicant is encouraged to select another pre-approved consultant (within given
Stage 2: Once deemed eligible and in absence of any integrity concerns or concerns regarding
the project’s potential registration as a CDM project activity, applications may, if necessary, be
further verified , through a site visit usually conducted by a designated country team.
Stage 3: Based on the initial screening and information collection a detailed technical
assessment will be undertaken, i.e. thorough evaluation of the proposed methodology, the
expected emission reduction and the feasibility of the proposed approach, as outlined in the Loan
Stage 4: Having assessed the application, the loan secretariat will submit a recommendation for
a decision by the Technical Review Committee (TRC) at its next meeting, if the application has
been submitted in time. Otherwise the application will be evaluated at the following TRC
meeting. The TRC, comprised of external and independent CDM technical experts and UNOPS,
will decide if the loan shall be approved or not.
The above stage-based structure with independent parties involved throughout the process shall
ensure best possible screening and selection formation.