Trusted by millions of Kenyans
LoginRegister
Study resources on Kenyaplex

Get ready-made curriculum aligned revision materials

Exam papers, notes, holiday assignments and topical questions – all aligned to the Kenyan curriculum.

Browse exam papers
Or go directly to:
Class notes Holiday assignments Topical questions Other resources

What should credit appraisal criteria focus on?

What should credit appraisal criteria focus on?

Answers

Kavungya
i) Amount and purpose of loan facilities and sources of repayment
ii) Integrity and reputation of the applicant as well as his legal capacity to assume the
credit obligation
iii) The risk profile of the borrower and the sensitivity of the applicable industry
sector to economic fluctuations
iv) Performance of the borrower in any credit previously granted by the financial
institution and other institutions
v) The borrower’s capacity to repay based on his business plan, if relevant, and
projected cash flows using different scenarios
vi) Cumulative exposure of the borrower to different institutions
vii) Physical inspection of the borrower’s business premises as well as the facility that
is the subject of the proposed financing
viii) Borrower’s business expertise
ix) Adequacy and enforceability of collateral or guarantees, taking into account the
existence of any previous charges of other institutions on the collateral
x) Current and forecast operating environment of the borrower
xi) Background information on shareholders and directors
xii) Management capacity of corporate customers
Kavungya answered the question on March 26, 2019 at 09:27

Answer Attachments

Next: What is the English common name for Cannabis Sativa?

Previous: How is a vector image different from a raster image?

View more Economics of Microfinance II Questions and Answers  |  Return to Questions Index

Exams With Marking Schemes

Related Questions