Economy, asked by AvantikaPardhane, 1 year ago

what are the reason why the bank might not be willing to lend to certian borrowers

Answers

Answered by maryamkincsem
2

Bank is one of the institutions which is known for its generation of loans. These loans may be long term, short term or middle term.

Whether a certain bank is willing to give a loan to a certain entity, depends on the sole decision making of that bank.

For example:


Sometimes a bank might not agree to give a loan to a certain borrower, this depends on the following factors

1- The interest is too high and the borrowers, previous records may show that he wont be able to pay interest on time

2- This borrower is previously a known defaulter

3- This borrower, for instance, his new business proposal lacks potential to gain maximum profits, under the digression of the bank people.

4- The borrower's guarantor isn't well known, or is shady, or lacks the goodwill

5- The business in which the bank is supposed to give loan, lacks market value or good will. Example: They have been bad mouthed. Reputation is in lacking.

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