What can the bank do to mitigate credit risk

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Question: Maria, with low credit risk, gets the approval for loan allotment. Maria successfully paid a couple of installments of $10,000 during the year. However, Maria had some big losses in her business due to offering goods on credit to customers with low credibility. The bank thinks that Maria might not be able to make any further payments against the loan. The current situation creates huge risks to the bank against a loan provided to Maria. Moving forward, what can the bank do to mitigate credit risk? Could the bank have done anything differently in Maria's case? Take into consideration how credit ratings are determined.

Reference no: EM133496309

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