Credit Rating Framework (Small Business/Petty Trader Loan)

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The presentation has the framework designed for rating the credit worth of a customer for small business/petty trader loan

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Credit Rating Framework (Small Business/Petty Trader Loan)

  1. 1. Credit Rating Framework – Small Business/Petty Trader Loan<br />Banking and Financial Services<br />By,<br />PankajSaria<br />Prasanna R<br />
  2. 2. Small Business Loan<br />For individual conducting business with or without hired labors<br />Used to<br /> purchase equipments<br />Repair and renovate existing equipment<br />Acquire and repair the business premises or tools<br />Generate working capital<br />
  3. 3. Petty Trader Loan<br />Individuals, proprietorships, partnership firms, co-operative societies<br />For working capital and development activities<br />Terms and Conditions<br />Business units established for a minimum of 2 years<br />Maximum: 25 Lakhs<br />Non-agricultural land and building mortgage<br />
  4. 4. Credit Score Calculation<br />Fundamental elements<br />Payment history – consistency on time and terms of the agreement<br />Available credit – Total credit available<br />Credit utilization – Credit of the total available which are in use<br />Credit balances – Current account balances<br />Depth of credit – Credit history and mix of credit type<br />Recent credit – recently opened credit accounts and enquiries<br />
  5. 5. Risk Assessment – Business (Internal) Weight: 50 %<br />
  6. 6. Risk Assessment – Business (Internal) Weight: 50 %<br />
  7. 7. Risk Assessment – Business (External) Weight: 30 %<br />
  8. 8. Risk Assessment – Personal Weight: 20 %<br />
  9. 9. Calculation – Final Rating<br />
  10. 10. Thank You<br />

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