International Finance Corporation2015-04-142015-04-142011-06https://hdl.handle.net/10986/21740Bank loans can become non-performing because of problems with the borrower s financial health, problems with the design or implementation of lender protection features, or both. In ascertaining how to deal with a problem loan, it is important to distinguish between a borrower s ability to pay and willingness to pay, Making this distinction is not always easy and requires effort. This manual was written as a guide for lending institution staff dealing with non-performing loans (NPLs) extended to corporations and small and medium enterprises (SMEs). It deals with both ad hoc and systemic financial distress and delves into how borrower problems may have arisen in the first place. It provides guidance to lending institutions staff responsible for handling individual problem loans and to senior managers responsible for organizing portfolio-wide asset resolution.en-USCC BY-NC-ND 3.0 IGOACCOUNTINGACCOUNTS RECEIVABLEARBITRATIONARREARSASSET CLASSIFICATIONASSET PRICEASSET QUALITYASSET RESOLUTIONASSET SALESBALANCE SHEETBANK BALANCE SHEETSBANK LOANBANK LOANSBANKING REGULATIONSBANKING SECTORBANKING SYSTEMBANKRUPTCYBANKRUPTCY COURTBANKRUPTCY FRAMEWORKBANKRUPTCY LAWBANKRUPTCY LAWSBANKRUPTCY PETITIONBENEFICIARYBORROWERBUSINESS BORROWERBUSINESS PLANCASH FLOWCASH FLOWSCASH MANAGEMENTCASH SHORTAGESCENTRAL BANKSCHANGES IN OWNERSHIPCLAIMANTSCOLLATERALCOMMERCIAL BANKCOMMERCIAL BANKSCOMPANY LAWCOMPANY LOANCONCESSIONCONFLICT OF INTERESTCONFLICTS OF INTERESTCONSEQUENCES OF BANKRUPTCYCONSUMER LOANSCONTINGENCY PLANNINGCONTRACT LAWCONVERSIONSCORPORATE GOVERNANCECORRUPTIONCOSTS OF COLLECTIONCOUNTRY RISKCREDIBILITYCREDIT RISKCREDITORCREDITORSCURRENCYDEBTDEBT FINANCINGDEBT FORGIVENESSDEBT INSTRUMENTSDEBT OBLIGATIONSDEBT PAYMENTDEBT RELIEFDEBT-EQUITYDEBT-EQUITY SWAPSDEBTORDEBTSDEFAULTSDISBURSEMENTDISPUTE RESOLUTIONDISPUTE RESOLUTION MECHANISMDISTRESSED ASSETENCUMBRANCESENFORCEABILITYEQUIPMENTEQUITY CONVERSIONEQUITY CONVERSIONSEQUITY INVESTMENTSEQUITY WARRANTSESTATEEXPORTERSEXTERNAL DEBTFILING FOR BANKRUPTCYFINANCE CORPORATIONFINANCIAL CRISESFINANCIAL CRISISFINANCIAL DIFFICULTYFINANCIAL DISTRESSFINANCIAL HEALTHFINANCIAL INFORMATIONFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL PROBLEMSFINANCIAL REPORTINGFINANCIAL STATEMENTSFORECLOSUREFOREIGN EXCHANGEFOREIGN EXCHANGE RESERVESFRAUDFREE MARKETFUTURE FINANCIAL CRISISGOING-CONCERNGOVERNMENT DEBTGOVERNMENT INTERVENTIONILLIQUIDITYINDEBTEDNESSINDIVIDUAL LOANINDIVIDUAL LOANSINFORMATION SYSTEMINFORMATION SYSTEMSINFORMATION TECHNOLOGYINSOLVENTINSOLVENT BANKSINSURANCEINSURANCE POLICIESINSURANCE PREMIUMSINTEREST CALCULATIONSINTEREST PAYMENTINTERNATIONAL BANKINTERNATIONAL FINANCEINVENTORYINVESTINGJUDGMENTJUDGMENTSJURISDICTIONJURISDICTIONSLEGAL ACTIONLEGAL ENVIRONMENTLEGAL PROCEDURESLEGAL REQUIREMENTSLEGAL SYSTEMSLENDERLENDERSLETTERS OF CREDITLEVERAGELIABILITYLIENSLINES OF CREDITLIQUID ASSETSLIQUIDATIONLIQUIDATION PROCEEDINGSLIQUIDITYLIQUIDITY RISKLOANLOAN ACCOUNTLOAN ACCOUNTSLOAN AGREEMENTLOAN AGREEMENTSLOAN AMOUNTSLOAN BALANCELOAN CATEGORIESLOAN CLASSIFICATIONLOAN DOCUMENTATIONLOAN MONITORINGLOAN OFFICERLOAN OFFICERSLOAN PAYMENTSLOAN PORTFOLIOLOAN PORTFOLIOSLOAN RECOVERYLOAN REPAYMENTLOAN RESOLUTIONLOAN TERMSLOCAL BANKLONG-TERM LIABILITIESMAKING PAYMENTSMARKET COUNTRIESMARKET RISKMARKETABLE SECURITIESMATURITIESMATURITYMATURITY MISMATCHESMINORITY SHAREHOLDERSMORTGAGENEGOTIATIONSNET PROFITSNON-PERFORMING LOANNON-PERFORMING LOANSNONPAYMENTNPLOBLIGATIONS TO CREDITORSOUTSTANDING DEBTOVERSEAS DEBTPARTNER BANKSPAYMENT DEFAULTPAYMENT HISTORYPAYMENT OBLIGATIONSPAYMENT PROBLEMPAYMENT PROBLEMSPENALTYPLEDGESPORTFOLIOPORTFOLIO SUPERVISIONPOTENTIAL BORROWERPRIORITY OF CLAIMSPRIVATE EQUITYPROCUREMENTPROFIT MARGINSPROPERTY TAXESPUBLIC SECTOR DEFICITSREAL ESTATE COLLATERALREGULATORY AUTHORITIESREMEDIESREPAYMENTRETURNRETURNSRISK MANAGEMENTRISK MANAGEMENT SYSTEMSECURITY AGREEMENTSSECURITY INTERESTSECURITY INTERESTSSETTLEMENTSHAREHOLDERSHAREHOLDERSSHORT-TERM BORROWINGSMALL BUSINESSSTOCK OPTIONSSUBORDINATED DEBTSUPERVISORY BOARDSURETYTITLETRADE UNIONSTRANSACTIONTRANSFER OF RESPONSIBILITYTRANSFER OF SECURITYTRANSPARENCYTRUSTEETURNOVERUNSECURED CLAIMSVALUATIONVOIDABLE PREFERENCEVOIDABLE PREFERENCESWARRANTSWILLINGNESS TO PAYWORKING CAPITALWORKOUTWORKOUTSWorking PaperInternational Finance Corporation10.1596/21740