customer assessment & credit worthiness

CUSTOMER ASSESSMENT &

CREDIT WORTHINESSTRAINING WORKSHOP FOR SME’S OFFICERS’ OF

WALLSTREET STRUT INVESTMENT LIMITED.

PRESENTING BY THE GENERAL MANAGER,

‘BAMI ADEDAPO

LENDERS MUST EVALUATE THE RISKS OF LENDING MONEY TO OTHERS. IN MICRO LENDING, CREDITORS GENERALLY FOLLOW THE SAME PRINCIPLES TO EVALUATE A BORROWER'S CREDITWORTHINESS.

An assessment is done in a

likelihood that a borrower

might default on his or her

debt obligations. It is

based upon factors, such as his/her history of repayment and credit score. We as a lending institution also

consider the availability

of assets and extent

of liabilities to determine the probability of

default.

Assessing customers is a vital part of business

management because its enables us has an

organization to meet customers’ needs while

experiencing better profit and sound business growth.

As creditor we usually look at three factors known as the "three Cs": capacity, capital, and character.

Capacity

The present and future ability of the customer to meet his/her financial obligations. Some of the areas examined would be the customers’ work history and the amount of debt that he/she already owe (if any).

This could be in savings and other assets that could be used as collateral for loans. Even if you are not required to post collateral, many creditors express a preference that you have assets other than income that could be used to repay a loan.

Capital

CHARACTER

This boils down to trustworthiness, promptness in paying the existing bills and debts, which will be seem in the customer’s credit history.

A Customer can be assessed through this ways among others:

Self-Assessment

This is the process of looking at your clients closely in order to assess aspects that are important to his/her identity.

Existing Data

This module is particularly useful where data on the existing portfolio of loans is available to us.

These is an act of carefully watching and listening to someone. It is an activity of paying close attention to customers in order to get information they will never have allowed you to be aware of.Therefore by watching and listening you will be sure you will pencil down one or two info. Then you make you remark.

Observation

Reference

This could be done through information from other lending institutions as observed.

Therefore, the following fact should be laid out while running a report

Analysing Creditworthi

ness

Credit Evaluation

and Approval

Create a smart credit policy

Have a fair and Accurate

credit Transaction.