Credit Series- Introduction

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.

1. Bank statements and business model are the best match makers.
2. End use of funds is as important today as it was 20 years back.
3. Numbers are numbers. It’s as objective as thing can get.
4. Statutory dues and salary payments cannot be ignored.
5. Related party and arm’s length.
6. Risk and reward go hand in hand.
7. See the numbers, meet the people but also give some weightage to your gut feel.
8. Everything looking bad is not always bad and everything looking good is not always good.
9. Numbers if don’t match there is a story to be uncovered.
10. Don’t underestimate the potential of secondary research.
11. If market intelligence points to something, explore that further.
12. Do the basic stuff first, complex models can be built by many.
13. 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.