Spending 13 years in similar domain can be boring or can be interesting. So here I will be sharing some interesting observations I came across in this period.
To start with these are the points I came across while doing credit/ risk assessment over this period. For those not part of BFSI, these are the do’s and don’ts I followed when I was evaluating the financials and business sustainability in order to decide whether to lend or wait.
- Bank statements and business model are the best match makers.
- End use of funds is as important today as it was 20 years back.
- Numbers are numbers. It’s as objective as thing can get.
- Statutory dues and salary payments cannot be ignored.
- Related party and arm’s length.
- Risk and reward go hand in hand.
- See the numbers, meet the people but also give some weightage to your gut feel.
- Everything looking bad is not always bad and everything looking good is not always good.
- Numbers if don’t match there is a story to be uncovered.
- Don’t underestimate the potential of secondary research.
- If market intelligence points to something, explore that further.
- Do the basic stuff first, complex models can be built by many.
- If something is too complex, then it’s not normal. It may or may not be good
I will be covering each of these in a separate write up for each may or may not in this order.
I will be sharing my experience and approach in each of these. Feel free to share yours on these.
Note: These are personal views and in no way represent the organization(s) I am (was) part of.