1. INTRODUCTION TO CREDIT ANALYSIS
CHAPTER NO # 01

2. Meaning of Credit

3. Credit loss When debtors do not pay back
It occurs usually because of business failure

4. Reasons of credit loss Business failures Inflation
Currency devaluation

5. Business failure is due…..
↑ in competition
New technology
Substitues
↑ in prices
↓ in demand
Overestimation of demand
Oversupply position in the market

6. Continued ….. Credit loss due to inflation
Credit loss due to devaluation of currency

7. Role of credit Idle economic resource utilization
Availability of financial resources
Mobilization and channelization of resources
Economic growth and wealth maximization
Increasing purchasing power and living standard

8. Credit market Personal credit Business credit market
Government credit market

9. Merits of credit Wealth maximization Tax planning tool
Business control
convenience

10. Demerits If ROI ∠ Borrowing Chances of bankruptcy
Personal credit & excessive consumption
Fixed repayment obligations
Inflationary pressure

11. Suppliers of credit Commercial banks
Term lending/development institution
Public debt market
Other institution in credit financing
Trade credit