If a company is offering 120% collateral security but you are unsure of company's repayment ability. As a credit person will you fund the company?

As a rule of thumb, the decision to lend need to focus on the repayment ability of clients and not on collateral. Collateral is taken as a fall back position when things went sore. If the collateral is cash cover, yes I will lend after obtaining a signed lien letter from client and being satisfied with solvency status of the company.

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I agree to the opinion of Gamali Mongi

Agree with Gamali Mongi Corporate Credit Manager

agree with Mr. Sai,

thank you for the invitation

Absolutely right. Thanks for the answer Gamali Mongi. 

We are here to lend to companies which can repay their obligations primarily from cash generated from operations. We cant lend to a company which has huge asset base but there is no cash generation. In a similar way we cant lend companies by looking at the collateral offered by them. Collateral is just a fall back mechanism.

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