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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?

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Question ajoutée par SAI ANIMESH KUMAR N , Senior Manager, Credit , Ahli United Bank
Date de publication: 2015/06/06
Gamali Mongi
par Gamali Mongi , Corporate Credit Manager , National Bank of Commerce

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.

حسين محمد ياسين
par حسين محمد ياسين , Finance Manager , مؤسسة عبد الماجد محمد العمر للمقاولات العامة

agree with answers ,,,,,,,,,,,,,,,,,,,,,,,,,,,...................................

Mohammed Amin Petiwala
par Mohammed Amin Petiwala , CFO , Osool Poultry SAOC

I agree to the opinion of Gamali Mongi

Vinod Jetley
par Vinod Jetley , Assistant General Manager , State Bank of India

Agree with Gamali Mongi Corporate Credit Manager

Mohammad Ashi CFA CMA
par Mohammad Ashi CFA CMA , Group Finance Manager , QOAD

agree with Mr. Sai,

thank you for the invitation

SAI ANIMESH KUMAR N
par SAI ANIMESH KUMAR N , Senior Manager, Credit , Ahli United Bank

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.

Ahmed Mohamed Ayesh Sarkhi
par Ahmed Mohamed Ayesh Sarkhi , Shared Services Supervisor , Saudi Musheera Co. Ltd.

wait more details from our experts

 

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