Credit: Five C

1. The Professional Risk Managers’
International Association
“Five C’s: Character, Capacity,
Capital, Conditions, Collateral”
Fahad Zafar MBA(Bradford), BSc (Middlesex)
Co Regional Director

2. Risk Assessment
– Determining accuracy of facts,
– Evaluating and quantifying risk factors,
– Meeting business expectations,
– Satisfying company’s financial
objectives.
•

3. Credit Transaction
• Risk of non-payment,
• Timing,
• Security,
• Extra costs,
• Legal aspects,
• Economic Influences.

4. Character
• Willingness to pay,
• Morality,
• Background,
• Experience,
• Abilities,
• Favorable payment records,
• Bankruptcies,
• Litigation,
• Settlements.

5. Capacity
• Ability to pay bills when due,
• Cash flow awareness - past, present
& future,
• How current assets are managed &
utilized.

6. Capital
• Equity or net worth,
• Trend of business,
• Investment & utilization of fixed
assets.

7. Conditions
• Industry,
• Products,
• Terms - selling & buying,
• Delivery,
• Seasonal,
• Changes in operations,
• Rent or own,
• Locality of business.

8. Collateral
• Physical Assets,
• Guarantees - types & applications,
• Risk mitigation options.

9. Question & Answers
Thanks Alot !
fahadzafar@ymail.com