📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

  • google app store apple app store
  • ✖

      Question

      Which of the following is a risk faced by banks when

      lending to MSMEs due to information asymmetry?
      A Credit Risk Correct Answer Incorrect Answer
      B Market Risk Correct Answer Incorrect Answer
      C Currency Risk Correct Answer Incorrect Answer
      D Liquidity Risk Correct Answer Incorrect Answer
      E Operational Risk Correct Answer Incorrect Answer

      Solution

      Credit Risk arises because MSMEs may lack proper financial records, audited statements, or credit history, leading to difficulty in assessing their repayment capacity. This makes MSME loans riskier for banks.

      Practice Next
      ask-question