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130+ Free KASNEB DCM Practice Questions

Pass your KASNEB Diploma in Credit Management (DCM) exam on the first try — instant access, no signup required.

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2026 Statistics

Key Facts: KASNEB DCM Exam

3 levels

Diploma Structure

KASNEB Qualifications Booklet

12 papers

Total Examinable Papers

KASNEB DCM Syllabus

Kshs 3,500

Registration Fee

KASNEB Fee Structure

50%

Pass Mark Per Paper

KASNEB Examination Regulations

C- (minus)

Minimum KCSE Entry Grade

KASNEB Diploma Entry Requirements

3 hours

Official Paper Duration

KASNEB DCM Syllabus

KASNEB DCM is Kenya's three-level diploma in credit management examined by KASNEB. Register with KCSE C- for Kshs 3,500, book papers at Kshs 1,200–1,600 each, and pass with at least 50% at April, August, or December sittings. The syllabus spans credit principles, collections, credit law, and risk management across twelve papers.

Sample KASNEB DCM Practice Questions

Try these sample questions to test your KASNEB DCM exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 130+ question experience with AI tutoring.

1In credit management, the "credit cycle" typically begins with which step?
A.Credit application and customer identification
B.Debt write-off and account closure
C.Legal enforcement through court action
D.Annual financial statement audit
Explanation: The credit cycle starts when a prospective customer applies for credit and the creditor identifies the applicant, gathers information, and initiates assessment before any facility is granted.
2Which type of credit allows a borrower to draw, repay, and re-borrow up to an agreed limit without a fixed repayment schedule for each draw?
A.Revolving credit
B.Term instalment loan
C.Single-payment trade credit
D.Mortgage amortisation loan
Explanation: Revolving credit (e.g., credit cards or overdraft facilities) lets the borrower use funds up to a limit, repay, and borrow again within the facility terms.
3Trade credit is BEST described as:
A.Credit extended by suppliers allowing buyers to pay for goods or services after delivery
B.Credit issued by commercial banks only for consumer durables
C.Government grants to small enterprises with no repayment obligation
D.Equity investment by shareholders in lieu of cash payment
Explanation: Trade credit arises when a supplier delivers goods or services and permits the buyer to pay on agreed terms (e.g., net 30 days), supporting business-to-business transactions.
4The primary purpose of a credit policy in an organisation is to:
A.Set consistent standards for granting, monitoring, and collecting credit
B.Eliminate all credit risk by refusing every customer application
C.Replace the need for financial statements in credit decisions
D.Guarantee maximum sales volume regardless of repayment ability
Explanation: A credit policy documents approval limits, scoring criteria, documentation requirements, and collection procedures so credit decisions are consistent and aligned with risk appetite.
5Which financial ratio compares a firm's current assets to its current liabilities and is commonly reviewed in short-term trade credit analysis?
A.Current ratio
B.Debt-to-equity ratio
C.Return on equity
D.Earnings per share
Explanation: The current ratio (current assets ÷ current liabilities) indicates short-term liquidity and the ability to meet obligations due within one year — a key trade credit indicator.
6Consumer credit differs from trade credit mainly because consumer credit:
A.Is extended to individuals for personal or household purposes rather than business resale
B.Never requires any form of security or guarantee
C.Is exempt from all statutory disclosure requirements
D.Can only be offered by manufacturers to wholesalers
Explanation: Consumer credit finances personal or household needs (e.g., personal loans, hire purchase), whereas trade credit supports business purchasing and inventory cycles.
7A credit bureau in Kenya primarily helps creditors by:
A.Providing credit history information to support lending and collection decisions
B.Setting statutory interest rate ceilings for all lenders
C.Issuing business licences to credit providers
D.Auditing corporate financial statements before loan approval
Explanation: Licensed credit reference bureaus (e.g., under CBK regulation) collect and share borrower repayment histories, helping lenders assess risk and detect over-indebtedness.
8Export credit insurance is MOST useful when a creditor wants to:
A.Transfer the risk of non-payment by a foreign buyer to an insurer
B.Avoid compliance with foreign exchange regulations
C.Eliminate the need for shipping documents in international trade
D.Convert trade receivables into equity shares automatically
Explanation: Export credit insurance covers the risk that an overseas buyer fails to pay due to commercial or political causes, supporting exporters who extend credit terms abroad.
9The "five Cs" of credit traditionally include Character, Capacity, Capital, Collateral, and:
A.Conditions
B.Competition
C.Commission
D.Consolidation
Explanation: Conditions refer to external and loan-specific factors (economic climate, industry outlook, purpose of credit) that affect repayment prospects alongside the borrower's qualities.
10Open account terms in international trade mean the exporter:
A.Ships goods and allows the importer to pay on agreed terms without immediate payment or bank guarantee
B.Receives cash before production begins
C.Transfers ownership only after a confirmed letter of credit is advised
D.Must collect payment in cash at the port of discharge before releasing goods
Explanation: Under open account, the exporter ships and invoices the buyer, who pays later per contract (e.g., 60 days) — the riskiest method for the exporter but attractive to buyers.

About the KASNEB DCM Exam

The KASNEB Diploma in Credit Management (DCM) is a three-level diploma qualification preparing technicians and analysts for credit management, credit control, and collections roles. Level I covers fundamentals of credit management, commercial law, entrepreneurship and communication, and ICT. Level II covers credit management, principles of management, business mathematics and statistics, and law governing credit practice. Level III covers marketing and customer relations, foundations of accounting, principles of public finance and taxation, and practice of credit management. Each official paper is a three-hour written examination. This free practice bank reformats the syllabus into 100 multiple-choice items for revision.

Questions

100 scored questions

Time Limit

3 hours per paper (twelve papers across three levels)

Passing Score

50% per paper

Exam Fee

Registration Kshs 3,500; level booking Kshs 4,000–5,000; single theory paper Kshs 1,200–1,600 by level (Kenya Accountants and Secretaries National Examinations Board (KASNEB))

KASNEB DCM Exam Content Outline

~16%

Fundamentals of Credit Management

Credit cycle, types of credit, trade and consumer credit, policy, scoring, limits, and export credit

~8%

Commercial Law

Contracts, sale of goods, agency, partnership, negotiable instruments, and misrepresentation

~15%

Credit Management (Level II)

Credit risk, ratios, statement analysis, covenants, monitoring, and guarantees

~12%

Law Governing Credit Practice

CBK regulation, movable property security, consumer protection, hire purchase, and AML

~12%

Collections & Debt Recovery

Ageing, demand letters, restructuring, garnishee, repossession, and settlements

~12%

Practice of Credit Management

Strategic management, credit committees, ECL, stress testing, ethics, and CCP progression

~6%

Management & Communication

Management functions, motivation, entrepreneurship, and ICT in credit

~6%

Business Mathematics & Statistics

Interest, present value, expected loss, and statistical measures

~5%

Marketing & Customer Relations

Relationship marketing, segmentation, complaints, and loyalty

~8%

Accounting & Public Finance

Revenue recognition, doubtful debts, taxation, and the PFM Act

How to Pass the KASNEB DCM Exam

What You Need to Know

  • Passing score: 50% per paper
  • Exam length: 100 questions
  • Time limit: 3 hours per paper (twelve papers across three levels)
  • Exam fee: Registration Kshs 3,500; level booking Kshs 4,000–5,000; single theory paper Kshs 1,200–1,600 by level

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

KASNEB DCM Study Tips from Top Performers

1Build a firm foundation in Level I fundamentals — credit cycle, types of credit, and commercial law underpin later papers.
2Drill financial ratios and statement analysis daily; Level II credit management rewards fluency with liquidity and leverage measures.
3Learn Kenyan credit law frameworks: Movable Property Security Rights Act, Consumer Protection Act, and hire-purchase rules.
4Practice collections scenarios — ageing, demand letters, restructuring, and ethical conduct appear throughout the syllabus.
5Master business mathematics: simple interest, present value, and expected loss calculations are examinable skills.
6Connect Level III practice papers to real portfolio management — credit committees, ECL, and stress testing integrate earlier topics.
7Register and book papers early through the KASNEB student portal to secure your preferred examination sitting.

Frequently Asked Questions

What is the KASNEB Diploma in Credit Management (DCM)?

DCM is a three-level KASNEB diploma qualification in credit management. It prepares candidates for roles such as credit analyst, credit controller, and credit management technician across trade, consumer, and corporate credit.

How many papers does DCM have?

DCM has twelve papers across three levels with four papers per level. Level I covers fundamentals, commercial law, entrepreneurship, and ICT. Level II covers credit management, management, mathematics, and credit law. Level III covers marketing, accounting, public finance, and credit practice.

What are the entry requirements for DCM?

Candidates need a KCSE mean grade of C- (Minus), an IGCSE mean grade of D, or a KASNEB certificate qualification to register for the DCM programme.

What is the pass mark for DCM papers?

Candidates must score at least 50% to pass each KASNEB DCM paper. Failed papers are re-sat at a subsequent examination sitting.

How much does DCM cost?

New students pay a registration fee of Kshs 3,500. Level booking fees are Kshs 4,000 (Level I), Kshs 4,500 (Level II), and Kshs 5,000 (Level III). Single theory papers cost Kshs 1,200, Kshs 1,400, and Kshs 1,600 respectively by level.

When are DCM examinations held?

KASNEB holds DCM examinations in April, August, and December each year at approved examination centres in Kenya and designated foreign centres.

Can DCM graduates progress to CCP?

Yes. DCM provides a foundation for credit careers and can lead to the KASNEB Certified Credit Professional (CCP) qualification for advanced professional development in credit management.

Are these practice questions multiple-choice?

Yes. The official DCM papers are three-hour written examinations, but this free practice bank reformats the same syllabus into 100 multiple-choice items so you can revise and self-test quickly.