This course introduces the concept of Dealer Concentration Risk within the Tractor & Farm Equipment Credit framework. It focuses on understanding the portfolio risks arising from high dependency on a limited set of dealers, which can create concentration vulnerabilities and amplify the impact of dealer-specific disruptions on credit performance.
Learners will explore key assessment dimensions such as reliance on specific manufacturers and vendors, third-party dependencies, and the role of governance and verification mechanisms in managing concentration exposure, with an emphasis on independent validation and well-documented rationale. The course highlights how excessive dealer concentration can lead to correlated sourcing risks, operational dependencies, and potential contagion effects across the portfolio. It also distinguishes dealer concentration risk from broader portfolio diversification strategies, emphasizing its role in identifying and managing exposure-level concentration risks rather than designing portfolio allocation strategies.
By the end of the course, participants will understand how to assess and monitor dealer concentration risks in practice, particularly within Dealer, Manufacturer, and Ecosystem Risk Management. The course also emphasizes the role of the senior credit leader in setting portfolio limits, governing exception criteria, and ensuring strategic alignment across the Tractor & Farm Equipment Credit function, including oversight of concentration thresholds, documentation standards, exception handling, and escalation protocols aligned with credit committee priorities.