Q:What is Credit Appraisal?
A:Credit appraisal means an investigation/assessment done by the bank prior before providing any loans & advances/project finance. This involves following viability checks:
commercial,
financial &
technical.
Q:What is Commercial Viability?
A: The ability of a business, product, or service to compete effectively and to make a profit.
commercial,
financial &
technical.
Q:What is Commercial Viability?
A: The ability of a business, product, or service to compete effectively and to make a profit.
Q:What is Financial Viability?
A: The ability to generate sufficient income to meet operating payments, debt commitments and, where applicable, to allow for growth, while maintaining service levels. In banks, this is measured in terms of DSCR & Debt Equity Ratio for term loans and Current Ratio for WC Loans.
Q:What is Technical Viability?
A: This report analyses the locational advantage of project, production process and technology to be employed, availability of market to sell its products, availability & suitability of raw material, cost of equipment and its availability. Further it analyses availability of other facilities such as fuel, water, electricity, transportation etc. and whether these are available at reasonable prices. It also discusses availability of skilled, unskilled and supervisory staff besides managerial staff.
Q:What is most important factor in case of individual loans?
A: The ability to generate sufficient income to meet operating payments, debt commitments and, where applicable, to allow for growth, while maintaining service levels. In banks, this is measured in terms of DSCR & Debt Equity Ratio for term loans and Current Ratio for WC Loans.
Q:What is Technical Viability?
A: This report analyses the locational advantage of project, production process and technology to be employed, availability of market to sell its products, availability & suitability of raw material, cost of equipment and its availability. Further it analyses availability of other facilities such as fuel, water, electricity, transportation etc. and whether these are available at reasonable prices. It also discusses availability of skilled, unskilled and supervisory staff besides managerial staff.
Q:What is most important factor in case of individual loans?
A: The credit worthiness of applicant is foremost factor. The factors such as:
» Age
» Income
» Number of dependents
» Nature of employment
» Continuity of employment
» Repayment capacity
» Previous loans, etc. are taken into account while appraising the credit worthiness of a person.
Q What are 3 ‘C’ ?
A: while considering credit proposals Following 3 'C' are given importance: ,
A: while considering credit proposals Following 3 'C' are given importance: ,
» Character
» Capacity
» Collateral.
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