Limits and risk appetite

Module 02 / 5 · 60 min

Turn portfolio analysis into limits: sector, product, single obligor and group limits aligned with NBE large-exposure and related-party rules, and a capital-based credit budget now that the credit growth cap has gone.

In this module you will learn to

Draft a credit risk appetite statement with measurable limits
Test exposures against SBB/87/2024 large-exposure and SBB/88/2024 related-party limits
Set sector, product and region limits from portfolio data
Use SBB/95/2025 risk weights to build a capital-based credit budget after the removal of the credit growth cap

Built on

Erudite Africa course specification: 1.f Loan Portfolio Management, Training Module: Ethiopian Context (October 2026)
Erudite Africa: Ethiopian regulatory register in the Training Module: Ethiopian Context (October 2026)
NBE directives as listed in the lessons: SBB/87/2024, SBB/88/2024, SBB/90/2024, SBB/95/2025; NBE Risk Management Guidelines (May 2010); NBE MPC meeting No. 7 press release (July 2026)
A commercial bank's Revised Credit Procedure Manual (August 2025), unnamed
IFRS 9 Financial Instruments
Movable Property Security Right Proclamation No. 1147/2019; the law on property mortgaged or pledged with banks (reported as Proclamation No. 97/1998)

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.