Purpose Of Appraisal Of Investment Projects Of Commercial Banks

Meaning of investment project appraisal:

– Help investors choose the best investment project.
– Help state management agencies assess the necessity and appropriateness of the project in terms of economic and social development, capital technology, and environmental pollution.
– Help financiers make accurate decisions about lending or repaying.

Purpose of appraisal of investment projects of commercial banks
Appraisal of investment projects is especially important for commercial banks in investment credit activities. One of the characteristics of investment activities is that it takes place for a long time, so it may face many risks. If you want to lend safely, ensure the ability to recover capital and investment interest, then decide to lend. of the bank is based on the appraisal of investment projects.

Appraisal of an investment project will draw accurate conclusions about the feasibility, economic efficiency of the investment project, debt repayment ability, and possible risks to make a loan decision or a loan decision refuse.

From the appraisal results, it is possible to contribute ideas to investors, as a basis to determine the loan amount, reasonable debt collection rate, and create favorable conditions for businesses to do business effectively.

Because of such importance, when conducting project appraisal, it is necessary to:

– Mastering the economic development policies of the state, branches, localities and relevant legal documents.
– Make sure the production and business situation, the financial situation of the business to make appropriate lending decisions.