WHAT DOES A HEAD OF CREDIT DO?

Published: Apr 23, 2025 - The Head of Credit oversees the full credit function, from loan application review to risk analysis and portfolio management, ensuring compliance with regulatory and credit policies. This role drives the transformation of lending practices through automation, manages departmental budgeting, and supports staff development. The head also expands lending operations across regions and collaborates with executive leadership to align credit strategy with organizational goals.

A Review of Professional Skills and Functions for Head of Credit

1. Head of Credit Duties

  • Team Leadership: Lead a team of accounting professionals by providing clarity of vision and expectations, role modeling effective coaching and performance feedback, prioritizing resources, and facilitating alignment of the team and partners
  • Credit Modeling: Assist in the modeling of the allowance for loan losses under ASC 326-CECL, including review of key inputs and analysis of results in comparison to forecast and business operations
  • Account Reconciliation: Oversee reconciliation of basic and complex general ledger accounts, including research and resolution of discrepancies
  • Portfolio Oversight: Maintain oversight of the performance of the loan portfolio across all key metrics, including portfolio yield, provision, and delinquency
  • Journal Preparation: Prepare and review daily/monthly journal entries and supporting schedule
  • Cross-Department Coordination: Proactively coordinate with other department managers and key vendors to improve efficiencies, support overall goals and objectives
  • Variance Resolution: Identify systemic or isolated loan servicing variances and develop timely resolution plans
  • Process Improvement: Initiate process improvements to implement new procedures to enhance the workflow of the department and improve the accuracy of financial accounts
  • Financial Reporting Support: Support the financial reporting team for the preparation of the Form 10-Q, 10-K and other filings
  • Audit Management: Prepare and manage requests from internal and external auditors
  • Collection Analysis: Provide a detailed collection analysis for the CFO on delinquent accounts
  • Credit Risk Assessment: Assesses credit risk and determines the extension of credit for new or existing customers
  • Credit Reporting: Provides robust reporting of Credit and A/R analytics to support strategic and day-to-day operations
  • Staff Supervision: Responsible for the supervision and development of Credit staff

2. Head of Credit Details

  • Strategy Leadership: Lead strategy, analytics and innovation for credit risk management and financial services
  • Credit Monitoring: Proactively and sustainably manage and monitor credit risk at both a portfolio and a customer account level
  • Credit Operations: Build and manage a best-in-class credit operation, with a high-impact and right-sized organizational structure, tools, standards and systems
  • Risk Culture: Ensure company culture reflects an understanding of and passion for responsible financial services and shared accountability for credit risk management
  • Team Leadership: Provide strong leadership and management for the Credit team and coaching and capacity development for the team members involved in the credit process
  • Credit Strategy: Lead development of the cross-functional Credit Strategy, Credit Performance Management Dashboard and action plans
  • Customer Insights: Consolidate quantitative and qualitative inputs from customers and other sources to fully understand the repayment performance of customers
  • A/B Testing: Design and implement A/B tests to identify the most powerful ways can improve customer repayment behavior
  • Research Projects: Structure and implement customer insight research projects, such as mapping the financial lives of households, to deepen understanding of what drives repayment behaviors
  • Data Utilization: Use the data insight from the above to scale any that are effective in improving customer repayment patterns
  • Product Strategy: Inform pricing and product strategies to support the company's strategic objectives regarding Credit and customer repayment
  • Risk Assessment: Monitor, assess, and anticipate credit risk across the portfolio, and proactively and sustainably manage credit risk exposure in line with the company's strategy and targets
  • Performance Improvement: Identify key contributors to low performance and create action plans for improvement
  • Committee Leadership: Lead the Credit Risk Committee and ensure credit risk is accurately reported and adequately provisioned

3. Head of Credit Responsibilities

  • Credit Systems: Envision, implement and manage the systems, tools, structures, team and processes needed to support a highly effective and efficient credit operation
  • Process Design: Build effective, user- and field-friendly systems, processes, and tools that the teams need to make the largest and most cost-efficient impact possible on customer repayment patterns
  • Customer Protocols: Coordinate with the Customer Experience team to define protocols for how different teams interact with customers so as that encourage good repayment behavior in an inclusive and customer-friendly way
  • Policy Management: Create and maintain Credit policies and procedures in line with company standards, ensure their compliance, and seek out ways to improve their effectiveness and efficiency
  • Data Collection: Improve the way collect ongoing quantitative and qualitative data for each customer interaction to gain richer insight into their experience and repayment behavior
  • Cost Optimization: Monitor and optimize the cost of loan servicing to strike the right balance between effectiveness and cost efficiency
  • Customer Centricity: Ensure a responsible, engaging, and customer-centric approach to financial services at A2E at all points in the customer journey, and across all areas of the business
  • Cross-Functional Alignment: Collaborate with partners in other functions (Call Center, Service Center, Sales Team, etc.) to establish performance standards and create accountability for results
  • Feedback Mechanisms: Ensure there are timely and effective mechanisms for feedback to teams and team members on issues related to performance or compliance with policy and procedure, including retraining or other measures
  • Strategic Advocacy: Be an outspoken advocate for responsible financial services and credit risk management by providing strategic leadership, ongoing training and communication to the entire team
  • Team Building: Build a team that is passionate about the mission and embodies values
  • Operations Management: Manage the team and day-to-day operations related to Credit
  • Team Mentoring: Mentor the team (including field teams) to continuously build their critical thinking and execution skills so that they can maximize their contributions and grow with the company
  • Best Practices: Collaborate with other company market teams and the Central team to leverage best practices, implement best practices from all the networks and brainstorm solutions to common challenges

4. Head of Credit Job Summary

  • Credit Management: Responsible for the effective management of the credit and collection functions to ensure that Company policies, guidelines and strategies are followed
  • Collections Oversight: Oversee the collections department for credit collections and handling legal and repossession matters
  • Dispute Resolution: Manage collection/dispute activities, build solid working relationships between internal/external customers
  • Process Improvement: Continuously improve internal credit and collection processes to incorporate best practices and technical solutions
  • Policy Execution: Define and execute the credit and collection policies and processes by the guidelines established by the executive management
  • Cross-Functional Collaboration: Partner with other departments, such as sales, operations, credit risk assessment and customer service
  • Performance Metrics: Develop and improve metrics for departmental performance
  • Staff Development: Training (policies, procedures, compliance and skills), coaching, monitoring, counselling and motivating employees to ensure success
  • Team Supervision: Supervises daily activities and maximizes efforts of staff in their collection efforts on accounts receivable, with special emphasis on delinquent accounts and determines repossession action required
  • Issue Assessment: Analyzes and assesses credit and collection issues falling outside Company policies and guidelines and determines the course of action for resolution
  • Customer Settlements: Resolves customer disputes and negotiates settlements with customers on receivable issues and accounts
  • Bad Debt Review: Prepares regular write-off schedules and monthly/quarterly bad debt review for submission to senior management
  • Fraud Monitoring: Review orders and inquiries for potentially fraudulent activity
  • Fraud Prevention: Work with the Finance Team and senior management on fraud prevention and training

5. Head of Credit Accountabilities

  • Loan Review: Review loan applications to present to a credit committee
  • Policy Implementation: Implement the Bank’s Credit Policy
  • Risk Management: Responsible for measuring and managing the aggregate risk
  • Risk Analysis: Conduct risk analysis and monitor portfolio management
  • Budget Management: Implement a budget for the lending department
  • Pipeline Management: Proactively manage a pipeline of property finance applications from receipt to completion
  • Staff Development: Continually appraise staff training and development needs
  • Policy Enhancement: Propose developments and enhancements to the lending policy
  • Regulatory Compliance: Regulatory governance and compliance with the lending and credit policies applicable to the business including management of large exposures and concentration risk
  • Lending Expansion: Grow the presence, size, and reach of the lending function across the whole of South Africa
  • Credit Operations: Manage the full credit function, top to bottom
  • Lending Transformation: Complete transformation of lending practices, moving from intuitive and manual to scored and automated
  • Executive Collaboration: Work hand in hand with the CEO to deliver the new bank
  • Regulatory Monitoring: Monitor and interpret developing regulatory requirements in all areas of financial risk management
Relevant Information
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What Does A Credit and Collections Manager Do?
What Does A Credit Risk Manager Do?
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