Discuss the objectives of credit risk management process in MFIs

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Expert Solution

There are different objective of credit risk management process in micro financial industries. They are as follows-

A. maintaining a high quality of their assets so that they can face the address economic scenarios.

B. employment of better risk management mechanism within the bank that will check the credit worthiness and anticipate the likelihood of loan default and make the management of loan more efficient.

C.another objective of Credit Management is to refrain from employing unethical and harmful recovery tactics that may lead to unintended consequences like the death of borrower

D. Maintaining fair disclosure and flexibility while maintenance of books of accounts so that the interest of various stakeholders can be protected

E.the objective of micro Financial institutions are also to offer the loans to borrowers at a reasonable rate of interest so that the repayment of loan does not seem out of reach.

jeff jeffy answered 1 year ago

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