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Q » Explain the meaning of credit risk.
01 Nov, 2025
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A » Credit risk refers to the potential that a borrower will fail to meet their obligations in accordance with agreed terms, leading to a financial loss for the lender. It is a crucial consideration for financial institutions, as it impacts lending decisions, interest rates, and risk management strategies. Effective credit risk management involves assessing a borrower’s creditworthiness and implementing measures to mitigate potential default risks.
01 Nov, 2025
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