Collateral Risk Assessment

Collateral Risk Assessment is the process of evaluating the safety and reliability of assets pledged to secure a loan or financial transaction. It involves analyzing the value, liquidity, and stability of the collateral to ensure it can cover the lender’s potential losses if the borrower defaults. This assessment helps lenders determine the level of risk involved, set appropriate loan terms, and decide whether to accept the collateral. Overall, it aims to balance supporting credit access with minimizing financial exposure.