PPB: Concepts and Practice · Part B: Functions of Banks

Chapter 12: Principles of lending and credit appraisal

Why a bank lends, how it tests a borrower and a proposal, and the limits and fair-lending rules it must follow.

Buyers of the e-book, or of the print copy, which includes it, read the whole chapter. Everyone can read the free sample, pages 1 to 24 of the e-book.

In this chapter

• 12.1Principles of lendingp. 157
• 12.2The appraisal, and credit informationp. 158
• 12.3Ratios and working capitalp. 159
• 12.4Term loans: is the project viable?p. 160
• 12.5Limits on lending; fair lendingp. 161
• Exam traps and quick checksp. 162
• Practice: 16 questions in three roundsp. 163
• Answers, with every wrong option explainedp. 165
• Make it stickp. 167
• Chapter 12 on one pagep. 168

Corrections and updates

None for this chapter so far. Every correction to the book, and any rule that changes after its date, is listed on the errata page.