This course introduces the concept of Dealer Incentive Structures & Risk Implications within the Tractor & Farm Equipment Credit framework. It focuses on understanding how dealer incentives, commissions, and promotional schemes influence borrower sourcing, credit quality, and overall risk outcomes.
Learners will explore key assessment dimensions such as the structure of dealer incentives, commission-driven behaviors, linkages with manufacturers and vendors, and the potential for misaligned incentives to impact credit decisions, with an emphasis on independent validation and well-documented rationale. The course highlights how aggressive incentive structures can lead to risks such as over-financing, misrepresentation, or compromised borrower suitability if not properly governed. It also distinguishes dealer incentive risk from broader portfolio diversification strategies, emphasizing its role in identifying ecosystem-driven behavioural risks at the exposure level rather than managing portfolio allocation.
By the end of the course, participants will understand how to evaluate incentive-related 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 incentive structures, documentation standards, exception handling, and escalation protocols aligned with credit committee priorities.