Retail Lending Certification Quiz

What is the primary role of BFIs in the financial sector?

• To manage government funds exclusively

• To only provide loans to large corporations

• To channel financial resources from depositors to borrowers

• To lend money without assessing credit risk

Which of the following is a purpose of credit in supporting Business Lending context?

• To provide personal loans for vacations

• To support business investment in working capital or capital expenditure

• To fund government projects

• To finance personal consumption

What is the first step in the credit risk identification process?

• Assessing the borrower's credit history

• Assigning a Credit Risk Officer to review loan files

• Verifying the collateral value

• Calculating the loan purpose

Which document is NOT required for Customer Due Diligence (CDD)?

• Passport

• National identity card

• Business registration

• Credit history report

What type of loan is suitable for a business needing flexibility in repayment during peak seasons?

• Home Improvement Loan

• Overdraft

• Revolving Loan

• Term Loan

What principle does a bank adhere to when ensuring that a loan is used for the right purpose?

• Principle of Customer Satisfaction

• Principle of Credit Assessment

• Principle of Loan Utilization

• Principle of Risk Management

If a borrower has a high Debt Service Coverage Ratio (DSCR), what does it indicate?

• The borrower has multiple loans

• The borrower has a strong repayment capacity

• The borrower is likely to default

• The borrower is in financial trouble

What should a bank do if a borrower has not paid for more than a year?

• Send a notice of demand

• Offer a new loan

• File a lawsuit immediately

• Ignore the situation

Which of the following is a sign of credit deterioration?

• Stable income and business growth

• Borrowing from multiple lenders in a short period

• Timely payments on all loans

• Consistent loan utilization

What is the purpose of a notice of demand letter?

• To terminate the loan agreement

• To inform the borrower of a loan approval

• To request payment or action on a loan

• To offer a new loan product