lending-policy

Vocabulary Word

Definition

'Lending-policy' is a set of guidelines, which financial institutions use to determine who to lend to, how much to lend, and under what terms. It can change based on the economy or risk.

Examples in Different Contexts

For credit unions, 'lending policy' dictates the terms and conditions under which members can receive loans. A credit union manager might mention, 'Our lending policy is member-focused, offering lower interest rates and flexible repayment terms.'

Practice Scenarios

Microfinance

Scenario:

With our focus on rural entrepreneurship, how can we ensure our services are reaching the people most in need?

Response:

Maybe we could adjust our lending policy to provide more loans to financially disadvantaged rural population.

Banking

Scenario:

Given our review, we've seen a significant increase in loan defaults. We need to rethink our approach to granting loans.

Response:

I agree, reevaluating our lending policy to factor in creditworthiness and income might limit loan default cases.