Question
In credit management, which of the following is a major
risk for MSMEs that is caused by delays in payments from large customers and the accumulation of receivables?Solution
Liquidity risk arises when an MSME’s ability to meet its short-term obligations is compromised, particularly due to delays in the collection of receivables. This can prevent the MSME from having enough cash flow to pay for raw materials, wages, or other operational expenses.
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