Credit Planning in Cooperatives
Credit Planning A credit planning is to set out procedures for defining and measuring the credit-risk exposure within the Group and to assess the risk of losses associated with credit extended to customers, financial investments and counter party risks with respect to derivative instruments. The main aspects of a credit planning are- 1) The terms and conditions on credit, 2) Customer qualification criteria, 3) Procedure for making collections, and 4) Steps to be taken in case of customer delinquency. Factors affecting Credit Planning An effective Credit planning should include the following Considerations · Objectives of the credit function · Opening procedures and obtaining information for new accounts · Assessing & evaluating the proposals · Terms and condit...