Credit Analysis & Lending
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Credit Analysis & Lending - Details
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39 questions
| 🇬🇧 | 🇬🇧 |
| The risk that a loan might not be repaid | Credit Risk |
| The risk that the operational system may fail | Operational Risk |
| Obligations have to be paid in a currency other than that of the domestic currency | Currency Risk/ Exchange Risk |
| The Impact of changing interest rates | Interest Rate Risk |
| An obligation is not in the domestic currency of the country in which it occurs | Country (Transfer) Risk |
| Character, capacity, capital, collateral, condition | What are the Five (5) C's of credit/ lending? |
| Collecting information about the borrower’s track record of integrity, repayment ability and spending habits. | Describe character assessment. |
| Soundness of a borrower's financial position and borrower must be able to generate sufficient net income to service the loan repayment. | Two key factors of a borrower's capacity |
| Asset and liabilities (personal loans) Audited financial statements and projected cash flow (businesses) Ability of the business’ creditors to pay their debts | Explain the soundness of a borrower's financial position. |
| Second source of repayment | Collateral |
| Stability of value, marketability, be easily valued, durable and portable. | Qualities of good collateral |
| The price of the security must not be subject to wide fluctuations. | Stability of value |
| Macro-economic variables | External factors |
| Introduction of the customer, Application by the customer, Review of the application, Evaluation and Monitoring and control | Five stages to analyze a new loan |
| Entails plan to repay and contingency plans. | Application of customer |
| CHARACTER, ABILITY MARGIN, PURPOSE, AMOUNT, REPAYMENT, INSURANCE( SECURITY) | Review of application |
| Character | "C" in CAMPARI stands for? |
| Ability or Amount | "A" in CAMPARI stands for? |
| Margin | "M" in CAMPARI stands for? |
| Purpose | "P" in CAMPARI stands for? |
| Repayment | "R" in CAMPARI stands for? |
| Insurance or security | "I" in CAMPARI stands for? |
| Lender must review progress regularly Early detection can be controlled by offering advice | Monitor and Control |
| Econometric techniques | Approaches to credit measurement |
| Involved in modeling of the probability of default. | Econometric techniques |
| Increased competition in the loan market. | What are the factors that influence technology based credit risk analysis? |