It refers to the risk that a borrower may not repay a loan and therefore that the lender may lose the principal of the loan and the interest. It is calculated considering the overall ability to repay of the borrower. There are many different models used by lenders to assess this risk.
P27 Team
View posts by P27 TeamA cadre of associates that deliver short consultations and project-based business services to both SMBs and larger businesses. Their expertise includes business change, business development, business planning, digitisation, ESG integration, financial markets, green finance, leadership development, marketing, regionalisation, risk management, valuation and more.