Introduction to Banking - Essay Example

Despite the fact that the borrower was pursuing a professional course which needed the inputs of expensive photographic equipments; the borrower had never ever approached the bank even for a student loan. (ii) A prime factor responsible for the borrower not approaching the bank for even a student loan is the financial resourcefulness and entrepreneurship skills exhibited by the borrower as a freelance photographer even while she was a student. She was able to sell her work as a freelancer. This implies that she had developed substantial trade contacts over all these years which are now going to stand in good stead for the sale of photographs from her current project.

Case facts go on to reveal that she is on the threshold of some category of fame in photography circles. Her entrepreneurial abilities provide further comfort to the banker. (iii) Case facts reveal that her parents are generous and thereby affluent () and have supported their daughter liberally in the past. They have been cited as one of the reasons that she was not required to obtain loan during her student days. For the purpose of the present project it may be good idea to accept collateral securities from such parents.

They can also be utilized as guarantors for the present loan. Her background check thus reveals no factor which would be an inhibiting factor in extending her the loan. However following specific questions may be asked to her during her loan interview to complete the appraisal process:(a) She may be asked to furnish a firm and complete itinerary of her project in Africa. She may be asked to indicate clearly the number of days she intends to stay in Africa, the number of locations she would visit, her boarding and lodging arrangements at each such location, her local conveyance and other expenditures.

Case facts reveal that borrower has sought the loan for air tickets and photographic equipment; it is apparent that most of the above expenditure she wishes to put in through her own sources as margin. It is important to estimate this margin available with her as otherwise rest of the project and bank lent funds would be of no specific use. Thus bank must estimate all such expenditures and probe her sources and their availability at the project start date. These sources could include her own savings, her parents support, support from any other photograpy association, magazine or institution or even any grant or fellowship. (b) The next pertinent set of questions would be on specific items she is seeking loan for viz.

air tickets and photographic equipment and accessories. Borrower may be asked to furnish the names of the specific airlines she would be traveling on to Africa along with her assistant. In case enquiries reveal that the airlines she proposes to use is expensive or that other airlines are offering more economical round tickets then the borrower would be asked the reason for preferring the chosen airlines. She may also be advised to avail of the cheaper airlines. Coming to her other need viz of photographic equipment and accessories queries may be framed on the specific equipment she proposes to buy for her project and why she thinks that such equipment is more suitable both in terms of price and performance, from amongst other same genre equipment.

The banker may like the borrower to show the process of narrowing down