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Credit Analysis and Lending Management Assignment

   

Added on  2020-06-04

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Finance
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CREDIT ANALYSIS ANDLENDING MANAGEMENT
Credit Analysis and Lending Management Assignment_1

Table of ContentsINTRODUCTION...........................................................................................................................1TASK...............................................................................................................................................1REFERENCES................................................................................................................................9
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INTRODUCTIONCrowdfunding and the P2P lending is the approaches which leads to development ofFintech in the practices and marketplace of lenders and borrowers. This brings large amount ofchallenges to the banks and other financial institutions because of extended services of creditfacilities given through increased growth of fintech in activities. This system integrates theinvestors, borrower actions, donators and the person having amount funds to distribute or give itto other for lending. This provides an easy access to the needs of people as well as provides anconvenient and user friendly accessible base to the use to collect money from various sourcesavailable over the medium of internet (Kolapo, Ayeni and Oke, 2012).In this particular report discuss about the challenges faced by the banks and otherinstitutions engaged in financial services. The reason behind the development of these challengesand risk for the revenue generation by banks are also described in this assignment. The variousplatforms used by fintech in order to extended the credit services to the clients appropriately bypeer to peer lending and equity crowdfunding are also describes in this respective assignmenteffectively.TASKCredit Facility and lendingIt is important for financial institution and other platforms to manage their lendingeffectively through carrying out an efficient credit analysis for market development andgeneration of returns. The credit facility is an loan or the companies are borrowing from variousfinancial platforms like banks and other institutions lenders. These loans and credits can be inform of revolving credit, committed facilities, etc. The companies, people are going for makingfunds for in investments from crowd funding and investing in stock market and capital markets.Extension of credit and loans by financial firms has been continuously challenged by the growthin Fintech. The companies can access to lending facilities over the medium of internet(Bhattacharya, 2011). The lenders also providing loans to the clients with flexible time period ofrepaying their credits.Financial PlatformsInternet has bring large number of revolution to the investors market and creditorsmarket. This internet has collaborated market of lenders, investors, borrowers and donator of1
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money. There have been developed many financial platforms in today world which providedcredit facility in marketplace to the borrowers who wants to invest in market. Some of thefinancial platforms which increased by development of fintech in marketplace are defied asfollows:Peer to peer (P2P) lending: This working model of P2P lending states that there aremany investors and institutions who are acting as capitalist to the borrowers inmarketplace. This respective model allows an person to borrow money from differentinvestors and lenders who can be an individual or an institutions who is havingavailability of financial resources and wants to lends its money in market. Companies areengaged in providing credit facility to borrowers in order to make more money to gaininterest from loaned money in addition with the repayment or recovery of principalamount.Equity Crowdfunding (ECF): This is an business framework which provides an potencyan person to make an investment in any type of start-up or small enterprise in dealing ofequity shares of respective business firm (Weber, Scholz and Michalik, 2010).Traditionally the investment is limited in the hands of venture capitalist or big investors.But this respective model of equity crowdfunding allows an person to make investment inshares of different companies to get dividends over his initial contribution to thefinancing small business or start-ups which are listed in stock market. These ECFfinancial platform provides securities to their contribution as an lender for the companyor borrowers.Benefits of ECF and P2P lending platforms in credit analysis and lending managementThese respective business model provides large numbers of benefits to the new investors,Small business enterprises and also to the borrowers in marketplace. Some of the benefits of ECFand P2P lending platforms are as follows:Larger accessibility to capital market- These models provides better accessibility to theborrowers to the capital market especially for the Small and medium enterprises as these bodiesare not having accessibility to get loan or credit amount from banks. ECF provides wider area toaccess the equity finance by individuals or business organisation.Advantage over various costs- P2P lending financial platform is working with lowerinterest rate and having less margin over the interest on principal amount which helps borrowers2
Credit Analysis and Lending Management Assignment_4

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