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    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?
    A Market risk Correct Answer Incorrect Answer
    B Credit risk Correct Answer Incorrect Answer
    C Liquidity risk Correct Answer Incorrect Answer
    D Foreign exchange risk Correct Answer Incorrect Answer
    E Operational risk Correct Answer Incorrect Answer

    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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