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Decode the debt

A credit analyst evaluates clients’ financial information to figure out their creditworthiness. They analyse financial information from various sources and assess the risk of issuing credit to clients.

education Updated: Sep 22, 2011 11:20 IST

The lowdown
A credit analyst evaluates clients’ financial information to figure out their creditworthiness. They analyse financial information from various sources (company balance sheets, news reports, etc) and assess the risk of issuing credit to clients. In simple words, they gauge the risk potential and project if debt will be repaid through business analysis, financial statement analysis, ratio analysis etc. Professionals can practice in rating agencies, fund houses, investment banks, merchant banks, NBFCs, Micro Finance Institutions and various other forms of financial institutions

Clock Work
The average day at work of a risk analyst in a credit rating agency:
9.30am-1pm: Reach office. Check and respond to mails. Discuss work plan with supervisor. Go through financial papers (company information, project plan, balance sheet) and analyse company and industry data. Call up and discuss issues with clients
1pm: Lunch break
2pm: Prepare for meetings with clients. After the meeting, write a credit analysis report
7.30 pm: Pack up for the day

The payoff
The pay package of a credit analyst from a reputable instution is about Rs5 lakh to Rs6 lakh a year. With experience, you can grow to be a CEO or an MD where the median salary, with a PG degree is about Rs40 lakh a year

Skills/TRAITS
. Good quantitative aptitude
. Sharp analytical and organisational skills
. Confidence
. Strong written and oral communication skills in English (for report-writing, making presentations)
. Ability to multi-task and perform under deadlines
. A strong sense of ethics
. Good presentation skills
. A liking for numbers and analysis
. Good understanding of the finance industry

Getting there
You may opt for any subject combination after Class 10 and at the bachelor’s level. Industry professionals say it’s not necessary to opt for the commerce stream in Class 12. However, subjects that hone your quantitative and analytical skills will give you an edge over your counterparts from other streams. Many employers ask for BTech, BCom or CA qualifications, but you need a Master’s degree, such as an MBA, to grow in your career. Credit rating agencies typically recruit MBAs in finance, preferably with a BCom or BTech degree. To gain an edge, you may consider top-up certifications such as certified financial analyst and financial risk manager to up your credentials

Institutes
. Indian Institutes of Management and other top-rated B-schools
www.catiim.in
. University of Delhi (Faculty of Management Studies, and Department of Financial Studies)
www.du.ac.in
. Department of Management Studies, Indian Institute of Technology, Delhi
www.iitd.ac.in
. Institute of Chartered Accountants of India,
www.icai.org
. International College of Financial Planning, New Delhi
www.icofp.org/html/index.php
. Chartered Institute of Management Accounting
www.cimaglobal.com

Pros and cons
.
Work involves continuous learning
. Opportunity to interact with senior management; make presentations to rating committee, which comprises
experienced people from the banking and financial sector
. Exposure to different industries and companies
. Freedom to function independently
. Entrusted with responsibilities from an early age
. Work might involve a lot of travel to plant sites
. Stressful job due to multi-tasking (as you handle different assignments simultaneously)
. One has to work with strict deadlines