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Prospective borrower and consideration points of Prospective borrower

Prospective borrower and consideration points of Prospective borrower need in credit purpose of banking. Prospective borrower means any person who seeks to borrow money to finance in business , construction, export or import trading, fisheries or agricultural sector.

Bank look for some special point to select a Prospective borrower some of are given below.

Lending Operation & Risk Management suggestion

1.Prospective borrower Credit-worthiness. 

These are traits from the bank or financial institutions point of view and have to do with the applicant’s credit history, their capacity to pay, and in some cases, the value of their collateral. Banks in particular like to lend to people with high net worth, stable incomes, have a good loan payment history, and liquid assets that produce income or value.




2. Prospective borrower Management skills. 

This includes a solid grasp of one’s cash flow, the ability to live within your means, and the skill of keeping accurate and timely financial records. banks will require not just proof of income, but proof of business management policy, ownership of assets, and so on.



3. Prospective borrower
Sense of integrity.

Integrity means paying back the agreed sum on time. Keeping your word is the basis of all financial agreements and is often the most overlooked trait. The lack of integrity is the main reason for a long history of lost wealth and damaged relationships—both business and personal.



4. Prospective borrower Sense of prudence.

 A good borrower does not bite off more than he can chew. He will only borrow what he can pay and track whom he borrowed from. Some borrowers are not done in by the size of their debts, but by the sheer number of them: they get loans from so many sources, juggling money to pay and repay creditors, that they’re overwhelmed by the task of organizing and keeping track of whom they borrowed from and how much they owe. Ideally, one borrows from a single source at a time, and consolidates any other existing debts into a single low-interest one.



5.Prospective borrower Purposeful spending

Perhaps the best indicator of a successful loan is what you ultimately do with the extra cash: is it going to provide you with greater value, or is it just going to take more money out of your pocket? Thus it’s imperative to be clear with your financial goal: that you are borrowing money to pay for or take care of a valuable asset. This may mean buying a home, a business, perhaps another investment. It may mean investing in people, such as educating yourself or a child.



Borrowing isn’t bad if you have a solid purpose, a good grasp of financial status, and the commitment to honor the agreements. By analyzing of all the above criteria will help to select a prospective borrower.  

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