3b. - Credit Risk in Banking
3b. - Credit Risk in Banking
UD
BU7056 Credit, Lending and Risk Management
SESSION 12
Session 2: Objectives
Introduction
BU7056 Credit,
to Banking
Lending and Risk Management
TYPES OF CREDIT RISKS
Capital: for a business-loan application consists of personal investment into the firm, retained
earnings, and other assets controlled by the business owner.
Conditions of the loan: refer to the terms of the loan itself as well as any economic conditions
that might affect the borrower.
Collateral: Personal assets pledged by a borrower as security for a loan are known as collateral. Business
borrowers may use equipment or accounts receivable to secure a loan, while individual debtors often pledge
savings, a vehicle, or a home as collateral.
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ommercial-lending/5-cs-of-credit/