Students

AFIN8020 – Credit and Lending Decisions

2026 – Session 2, In person-scheduled-weekday, North Ryde

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff
Jianlei Han
jianlei.han@mq.edu.au
Credit points Credit points
10
Prerequisites Prerequisites
ACST6003
Corequisites Corequisites
AFIN8003
Co-badged status Co-badged status
Unit description Unit description

This unit focuses on how banks and financial institutions make credit and lending decisions. We examine how lenders assess credit risk, make the decision to lend and structure loans to mitigate key risks. After a review of how various types of lending products can be matched to borrowers' requirements, we examine the core concepts of credit scoring models, probability of default, loss given default and exposure at default. These concepts inform our discussion of how banks manage credit risks through the loan structure, balanced against providing workable access to funding for the borrower. The obligations of borrowers under typical corporate loan documentation are discussed, including the practical implications for managing the banker-borrower relationship in normal times and when loans are becoming distressed.

Important Academic Dates

Information about important academic dates including deadlines for withdrawing from units are available at https://www.mq.edu.au/study/calendar-of-dates

Learning Outcomes

On successful completion of this unit, you will be able to:

  • ULO1: Explain how a borrower’s needs influence the selection of the appropriate loan product and lending structure for debt financing.
  • ULO2: Critique the alignment of the needs of a borrower with the risks a lender is prepared to accept and be able to implement the structural and documentary mechanisms for achieving this.
  • ULO3: Infer likely outcomes to the management of problem loans from both the lender’s and borrower’s perspective.

General Assessment Information

Unless a Special Consideration request has been submitted and approved, a 5% penalty (of the total possible mark) will be applied each day a written assessment is not submitted, up until the 7th day (including weekends). After the 7th day, a grade of ‘0’ will be awarded even if the assessment is submitted. Submission time for all written assessments is set at 11.55pm. A 1-hour grace period is provided to students who experience a technical concern.  

For any late submissions of time-sensitive tasks, such as scheduled tests/exams, performance assessments/presentations, and/or scheduled practical assessments/labs, students need to submit an application for Special Consideration.

Assessment Tasks

Name Weighting Hurdle Due Groupwork/Individual Short Extension AI Approach
Formal examination: Test 20% No Week 8 Individual No Observed
Professional practice: Credit risk analysis 30% No Week 12 Individual No Open AI
Formal examination 50% No Exam Period Individual No Observed

Formal examination: Test

Assessment Type 1: Examination
Indicative Time on Task 2: 10 hours
Due: Week 8
Weighting: 20%
Groupwork/Individual: Individual
Short extension 3: No
AI Approach: Observed

The purpose of this assessment is for you to demonstrate your understanding and knowledge of key topics from the unit.

You will participate in a formal test. Feedback on your performance will help you assess your progress through the unit content.

Deliverable(s): Test Individual assessment
On successful completion you will be able to:
  • Explain how a borrower’s needs influence the selection of the appropriate loan product and lending structure for debt financing.
  • Critique the alignment of the needs of a borrower with the risks a lender is prepared to accept and be able to implement the structural and documentary mechanisms for achieving this.

Professional practice: Credit risk analysis

Assessment Type 1: Professional task
Indicative Time on Task 2: 20 hours
Due: Week 12
Weighting: 30%
Groupwork/Individual: Individual
Short extension 3: No
AI Approach: Open AI

The purpose of this assessment is to develop expertise in credit risk analysis.

You will apply theoretical frameworks and quantitative methods to develop a credit risk assessment report and deliver an oral presentation.

Skills in focus:

  • Communication skills
  • Critical thinking and problem solving
  • Discipline knowledge
  • Work readiness

Deliverable(s): Report [max 2,500 words] + Presentation Individual assessment
On successful completion you will be able to:
  • Explain how a borrower’s needs influence the selection of the appropriate loan product and lending structure for debt financing.
  • Critique the alignment of the needs of a borrower with the risks a lender is prepared to accept and be able to implement the structural and documentary mechanisms for achieving this.

Formal examination

Assessment Type 1: Examination
Indicative Time on Task 2: 30 hours
Due: Exam Period
Weighting: 50%
Groupwork/Individual: Individual
Short extension 3: No
AI Approach: Observed

The purpose of this assessment is for you to demonstrate the expertise you have gained in this unit.

You will participate in a 2-hour exam held during the University Examination period. Important information about the exam will be made available on the unit iLearn page. You should also review the MQ Exams website for general tips.

Deliverable(s): Formal exam Individual assessment
On successful completion you will be able to:
  • Explain how a borrower’s needs influence the selection of the appropriate loan product and lending structure for debt financing.
  • Critique the alignment of the needs of a borrower with the risks a lender is prepared to accept and be able to implement the structural and documentary mechanisms for achieving this.
  • Infer likely outcomes to the management of problem loans from both the lender’s and borrower’s perspective.

1 If you need help with your assignment, please contact:

  • the academic teaching staff in your unit for guidance in understanding or completing this type of assessment
  • Academic Success for academic skills support.

2 Indicative time-on-task is an estimate of the time required for completion of the assessment task and is subject to individual variation.

3 An automatic short extension is available for some assessments. Apply through the Service Connect Portal.

Delivery and Resources

Recommend (not required) textbooks:

Hull, J.C. (2023). Risk Management and Financial Institutions, 6th ed. Wiley.

Crouhy, M., Galai, D. & Mark, R. (2014). The Essentials of Risk Management, 2nd ed.

Caouette, Altman, Narayanan & Nimmo (2008). Managing Credit Risk, 2nd ed. Wiley.

Duffie, D. & Singleton, K. (2003). Credit Risk: Pricing, Measurement and Management.

Technology Used and Required:

Necessary technology: Computer with MS Excel and Word, scientific or business calculator and internet access.

 

Unit Schedule

Week1
Introduction to Credit & Lending
Week2
Credit Risk & Credit Exposure
Week3
Measuring Default Risk & Credit Ratings
Week4
Credit Derivatives & Structured Products
Week5
Corporate Lending
Week6
Non-bank & Private Credit
Week7
Consumer Lending & BNPL
Week8 Mid-term Test
Week9
AI & Machine Learning in Credit
Week10
Climate & ESG Credit Risk
Week11
Lessons from Credit Crises (GFC & 2023)
Week12
Crypto, DeFi & Tokenised Credit
Week13
Revision

 

Policies and Procedures

Macquarie University policies and procedures are accessible from Policy Central (https://policies.mq.edu.au). Students should be aware of the following policies in particular with regard to Learning and Teaching:

Students seeking more policy resources can visit Student Policies (https://students.mq.edu.au/support/study/policies). It is your one-stop-shop for the key policies you need to know about throughout your undergraduate student journey.

To find other policies relating to Teaching and Learning, visit Policy Central (https://policies.mq.edu.au) and use the search tool.

Student Code of Conduct

Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/admin/other-resources/student-conduct

Results

Results published on platform other than eStudent, (eg. iLearn, Coursera etc.) or released directly by your Unit Convenor, are not confirmed as they are subject to final approval by the University. Once approved, final results will be sent to your student email address and will be made available in eStudent. For more information visit connect.mq.edu.au or if you are a Global MBA student contact globalmba.support@mq.edu.au

Academic Integrity

At Macquarie, we believe academic integrity – honesty, respect, trust, responsibility, fairness and courage – is at the core of learning, teaching and research. We recognise that meeting the expectations required to complete your assessments can be challenging. So, we offer you a range of resources and services to help you reach your potential, including free online writing and maths support, academic skills development and wellbeing consultations.

Student Support

Macquarie University provides a range of support services for students. For details, visit http://students.mq.edu.au/support/

Academic Success

Academic Success provides resources to develop your English language proficiency, academic writing, and communication skills.

The Library provides online and face to face support to help you find and use relevant information resources. 

Student Services and Support

Macquarie University offers a range of Student Support Services including:

Student Enquiries

Got a question? Ask us via the Service Connect Portal, or contact Service Connect.

IT Help

For help with University computer systems and technology, visit https://students.mq.edu.au/support/technology/service-desk. 

When using the University's IT, you must adhere to the Acceptable Use of IT Resources Policy. The policy applies to all who connect to the MQ network including students.

Changes since First Published

Date Description
20/07/2026 Change the mid-term test from Week7 to Week8

Unit information based on version 2026.03 of the Handbook