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What Is The Process Of Credit Analysis?

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Information collection stage

The first step is to collect the information pertaining to the client with regards to their financial history, record of loan payment, character, individual reputation and insolvency. The credit analyst should know about the purpose of the loan, amount and if it will be enough for the project. Information included should cover sources of repaying the money. 

Analysis stage 

During this stage information is analysed to judge accuracy. The analyst needs to scrutinise or thoroughly check identification information, trade licence, corporate charter, resolutions and any other documents submitted. The financial ability of the client is also checked. Using balance sheet, cash flow statements, income statements the analyst works out different financial ratios. The analyst will also look at the viability and effectiveness of the project which the loan is intended for. The banker will feel free to grant loan if the project is productive, expandable and profitable. They analyse the possibility /ability of the client to repay the loan by looking at the next cash flow and income of the applicant.  

Decision making stage 

The analyst identifies and measures the credit risk associated with the loan application and determines whether the level of risk inherent is acceptable or not. If the analyst is satisfied that the risk is acceptable and convinced that the loan will be repaid, he/she prepares and submits recommendation to the appropriate loan approval authority.  

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What Credit Analysts Look For?

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  • The credit analyst once convinced that the consumer is deserving of credit, will act as the client’s advocate in presenting the application to the bank’s loan committee and also guiding it through the bank’s internal procedures.  
  • The details obtained are also used to finalise the loan documentation, terms, rates and any special agreements which need to be highlighted. 
  • A credit analyst is a profession who possess expert knowledge in evaluating the creditworthiness of securities, individuals and companies.  
  • They determine the likelihood that a borrower can repay their financial obligations by assessing the borrowers financial and credit history. 
  • They also determine whether the economic conditions are favourable for the consumer to pay back the loan.  
  • Credit analyst also evaluates financial statements using ratios to determine the credit scores of consumers. 
  • Credit analyst provide unbiased recommendations to banks that allow them to offer loans to individuals and businesses. 
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Key Ratios To Analyse Creditworthiness

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  1. Debt to equity ratio: This allows lenders to compare the assets of the company with its debts. Financial institutions consider companies with a high ratio of debt to equity as a higher risk than companies with little or no debt. Calculating a debt-equity ratio is done by using a balance sheet to divide the company’s liabilities by its shareholder’s equity. 
  2. Operations margin: The profit of a company makes a percentage of its total sales which is called an operating margin. This helps to separate the gross revenue of a company and its net profit which measures a company’s profitability. 
  3. Current ratio: This is a liquidity ratio that measures the ability of a business to pay for its expenditure by expressing the number of times assets exceed their liabilities. Total assets are divided by total liabilities. 
  4. Inventory ratio: This measures a company’s production and purchasing efficiency. It notifies investors of the number of times a company has sold its inventory. It is calculated by dividing the cost of products /services by the cost of inventory. If a company has a higher ratio it means they are more efficient at turning over their inventory and they are most likely to be considered by lenders. 
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How To Get A Good Credit Score

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The consumer needs to have a credit history. A credit history is important as it allows lenders to evaluate how well you have settled your debts in the past. Your credit history also allows them to assess your affordability. 

Timeous payments of bills– paying bills on time also helps with a good score. This also goes to small bills that seem to be irrelevant, like the gym or library fee. These small bills might be found on your credit report and consequently affect your credit score.  

Keeping credit balances low also helps with a good credit score. Maxing out credit balances might be viewed as reckless and desperate. Credit card balances should be within 30 per cent of all your combined credit limits. 

Knowing what is required to get a good credit sore also helps maintain it. Five key pieces of information are used. These are payment history, level of debt, credit age, mix of credit and recent credit.  

Paying more than the minimum of what you are asked on your account also helps with a good score. Paying only the required amount might be viewed as distress.  

Check your credit sore. Knowing your credit score is important. It helps guard against fraudulent activities on your account. It also allows you to check for any errors in the information presented to Bureaus.  

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Different Types Of Credit Analysis Techniques.

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  • Common-size financial statements and financial ratios remove the effect of size, allowing comparisons of a company with peer companies (cross-sectional analysis) and comparison of a company’s results over time (trend or time-series analysis). 
  • Activity ratios measure the efficiency of a company’s operations, such as collection of receivables or management of inventory. Major activity ratios include inventory turnover, days of inventory on hand, receivables turnover, days of sales outstanding, payables turnover, number of days of payables, working capital turnover, fixed asset turnover, and total asset turnover. 
  • Liquidity ratios measure the ability of a company to meet short-term obligations. Major liquidity ratios include the current ratio, quick ratio, cash ratio, and defensive interval ratio. 
  • Solvency ratios measure the ability of a company to meet long-term obligations. Major solvency ratios include debt ratios (including the debt-to-assets ratio, debt-to-capital ratio, debt-to-equity ratio, and financial leverage ratio) and coverage ratios (including interest coverage and fixed charge coverage). 
  • Profitability ratios measure the ability of a company to generate profits from revenue and assets. Major profitability ratios include return on sales ratios (including gross profit margin, operating profit margin, pretax margin, and net profit margin) and return on investment ratios (including operating ROA, ROA, return on total capital, ROE, and return on common equity). 
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Creditworthiness Examples

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1. Mandla is a 32 year old Doctor who has previously opened an account WITH Dion Wired. Mandla has a steady income which comes every month and he pays his debts on times. Mandla also pays his rent and school fees for his kids. He has never omitted his payments and now he has a high credit score 

2. Jane is currently doing part time promotions for different companies. She is paid by commission and sometimes she does not receive anything due to low or no sales. Jane has also skipped her payments for her Edgars’ account because she did not have a stable income. Jane’s credit score is low and she might now be considered for a loan 

3. Educo (pvt ltd) is an upcoming online science school. They have recently applied for credit from the bank. The owners have a good credit history contributed by their length credit history. They have always paid accounts on time and never defaulted on payments. The owner’s financial statements are up to date and their company is profitable and promising to expand. Therefore they are credit worthy 

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Intel Unveils Full Specs For Its 18-Core i9 Extreme Edition CPU

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Intel unveiled the specifications and prices of its new range of Core X processors, including the 18-core Extreme Edition. The processors are aimed at the high-end desktop market and are compatible with the LGA 2066 socket found on Intels’s X299 chipset. 

Intel’s Core X Series processors are based on the Kaby Lake-X and Skylake-X architecture, and are available in Core i5, Core i7, and Core i9 models. The chips do not feature any integrated graphics, as all die space is occupied by CPU cores. 

Next-gen performance 

Intel said content creators can expect up to 20% better performance in VR content creation and up to 30% faster 4K video editing over the previous generation of Intel processors. Gamers will also see a performance improvement of up to 30% when multi-tasking. 

The Intel Core i9-7980XE Extreme Edition is the most powerful processor in the lineup, boasting 18 physical cores with 36 threads and a clock speed of up to 4.4GHz using Intel’s Turbo Boost 3.0 technology. 

The powerful CPU does not come cheap, however, and will retail for $1,999 (R26, 000) in the US. Intel Core X processors with 14, 16, and 18 CPU cores will be available from 25 September, while lower-end products will start shipping from 28 August. 

The specifications and US pricing for Intel’s new Core X Series processors are below. 

Intel made a big splash at Computex with its new Core i9 X-series family, with the crown jewel being its 18-core processor for desktops. But until we haven’t heard much in the way of technical details. Today, Intel revealed that the 18-core i9-7980XE will feature a base speed of 2.6GHz, with a Turbo Boost 2.0 clock of 4.2GHz. And using Turbo Boost 3.0, which speeds up performance of its fastest two cores, it’ll reach 4.4GHz. 

That’s just below the 4.5GHz top speed of Intel’s Core i7-7700K, its fastest mainstream processor for desktops. Basically, that means the 18-core chip will be no slouch when it comes single-threaded performance for games. (Check out our in-depth story on the development of the 18-core processor here.) 

It might seem strange to see the company’s most powerful processor with a base clock speed under 3GHz. But what’s more important are the boost figures, which will kick in when you actually need more computing power. As for the other members of the X-series family, the 16-core model will feature speeds between 2.8GHz and 4.4GHz, while the 14-core version starts at 3.1GHz. As usual, Intel can reach higher speeds on chips with fewer cores since there’s less of a heat issue to worry about. 

It’ll be a while until we get full benchmarks from these chips, but Intel gave us a small preview from its own testing. The 16-core i9 CPU reached a Cinebench R15 score of 3,200, while running an NVIDIA GTX 1080Ti GPU. That’s below a 24-core Xeon E5 2697, according to 3D Fluff’s database. The quad-core i7-7700K, meanwhile, scored just 966 on that same benchmark. 

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Extra Cash Loans – Quick Online Loans

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With so many families struggling to make it from paycheck to paycheck it’s not hard to see why quick, low value cash loans, known more popularly as microloans, are popping up more frequently in the news and advertising. They’re a simple, user-friendly solution to a problem we all have from time to time that doesn’t necessarily tie you into the traditional bank’s way of doing things. 

Many people need a little extra cash from time to time, whether it’s for groceries or sudden emergencies, like accidents or burst pipes. Getting cash loans from banks through formal and orthodox approach can be a problem. Most banks or commercial lenders require surety, a spotless credit record, and substantial paperwork before qualifying for a loan, even if it is a small personal loan. 

The underlying factor is that these loans are more than likely designed for those who don’t require extra cash, or require more substantial loans such as property acquisition and are paying back over a prolonged period of time. If you need a bond, they might be able to help you relatively more seamlessly, but still the paperwork and hassle is the same if you have an immediate need money to buy petrol until payday, or if you’ve had an accident and need the money for hospital bills. This is because traditional banks don’t typically deal with needs arising from day-to-day cash cash-flow demands. This is where microloans come in. A quick cash advance for generally up to R15,000 can be completed with minimal paperwork, cleared into your account within 24 hours, sometimes even on the same day, and ask for nothing more than a cellphone contract would – a bank statement, payslip, and proof of ID and residence. 

Since these quick cash loans are unsecured, you won’t need to put up your house or car to secure them. Accredited facilitators will also be able to assist you with finding the best loan option, interest rates and even provide professional advice and assist in correctly motivated applications for clients with compromised ITC records. Direct bank applications are inclined to be non-negotiable in this regard – miss a couple of cellphone bills and you probably wont be able to secure a cash advance, even if you can prove that you have the income. With cash loans, this can be overcome. 

Quick online cash loans are as simple as completing the application form online and getting a trained consultant to get back to you to confirm all your details. Without the endless paperwork, unnecessary phone calls, and with a wide range of loans and repayment periods to suit your need, you will no longer have to endure lengthy phone calls and repeat visits to the bank or brokers office. 

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Deloitte Digital Launches New Digital Banking Offering

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Deloitte announced the launch of Digital Bank, a new services offering for banks to accelerate their digital transformation. Based on the Salesforce Intelligent Customer Success Platform and utilizing the Salesforce Financial Services Cloud, Digital Bank helps banks create exceptional experiences by providing tailored banking capabilities with accelerated implementation and realisation of value. 

Deloitte Digital and Innovation leader. “To compete in the changing banking landscape, it’s important for banks to provide their customers with experiences that are genuinely and positively surprising in both their function and appearance. Digital Bank is designed to help banks create value by offering their customers banking capabilities that are tailored to their individual needs, behaviours and patterns.” 

The service is integrated with a wide range of leading cloud vendors, enabling clients to benefit from pre-integrated partner technologies. This flexible, open, and adaptable platform enables banks to deliver digital banking experiences that can drive differentiation, innovation and outstanding customer and employee experiences. 

Digital Bank’s capabilities and potential benefits include: 

Augmented Salesforce Platform with many technologies, fintech solutions and AppExchange partners, as well as personalized channel engagement through automated marketing using Salesforce Marketing Cloud. 

Ability to expand relationships by having full visibility into bank relationships across business units. 

Established customer trust through multifactor secured cloud banking platforms and improved onboarding for customers through a fully mobile process enabled by many technologies 

Increased speed and agility to meet customer needs, as well as the regulatory needs of the banking industry, using predictive analytics based on account behaviour to recommend next best offers and next best actions 

Accelerated implementation allowing banks to generate ROI faster, including linking newly created accounts in Salesforce to a blockchain secured digital identity 

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BlackBerry Key One Now Available In SA

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TCL Communications and Vodacom have launched the BlackBerry KeyOne smartphone in South Africa. 

Vodacom will be the exclusive launch partner for the BlackBerry KeyOne, offering the device from 8 August. 

Pre-orders are available through Cellucity’s website, which states that it will release the device to buyers from 7 August. 

Previously code-named “Mercury”, the BlackBerry KeyOne features a touch-sensitive physical keyboard and runs on Android 7.1. 

Its touch-sensitive keyboard lets you navigate without touching the screen and offers BlackBerry’s flick typing system on physical keys. 

The BlackBerry KeyOne will retail for R9, 649, and will be available for R479 per month on a 24-month Vodacom uChoose Flexi 200 contract. 

TCL said the end of its exclusivity period with Vodacom has not been determined. 

Below are the specs:  

  • Display: 4.5 IPS LCD capacitive touchscreen (434ppi) 
  • OS: Android OS, v7.1 (Nougat) 
  • CPU: Octa-core 2.0 GHz 
  • RAM: 3GB 
  • Memory: 32GB (expandable up to 256 GB) 
  • Camera: 12 MP, f/2.0, phase detection autofocus 
  • Video: 4K video recording at 30 fps 
  • Battery: Non-removable Li-ion 3505mAh 
  • Extras: Fast battery charging: 50% in 36 min (Quick Charge 3.0 

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