General rules in granting credit

The Five CS

Factors related to the bank

factors related to the quality of the credit facility provided

-Customer’s personality

-Financial and administrative capacity of the customer

-The customer’s self-financing ability i.e. capital

-Guarantees provided by the customer

-Economic conditions are factors related to the bank

-Objectives of the bank

-The financial and human resources of the bank

-The concentration of the bank in the market

-Liquidity considerations

-Bank strategy (Conventional, offensive, credit crunch)

-Credit and banking policy of the bank (under the general credit policy)

-Purpose of credit

-Credit period

-Loan amount

-Loan repayment method

-Source of payment

-The appropriateness of this credit to the credit policy

-The balance between the return and the cost of credit

-Risks

-Factors related to the bank