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    Question

    Which of the following types of credit risks is most

    relevant when an MSME has difficulty recovering dues from corporate clients, particularly when the invoices exceed the agreed-upon payment terms?
    A Market risk Correct Answer Incorrect Answer
    B Operational risk Correct Answer Incorrect Answer
    C Credit risk Correct Answer Incorrect Answer
    D Liquidity risk Correct Answer Incorrect Answer
    E Foreign exchange risk Correct Answer Incorrect Answer

    Solution

    Credit risk refers to the possibility of loss due to a borrower’s inability to repay debt or meet financial obligations. For an MSME facing difficulties in recovering payments from corporate clients, the primary concern is credit risk, particularly from receivables that exceed payment terms.

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