PURPOSE OF VALUATION OF INVESTMENT PROJECTS OF COMMERCIAL BANK

Purpose of commercial banks investment project appraisal

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 or loan decision. refuse.

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

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.

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

• Mastering the economic development policies of the State, branches and localities and relevant legal documents.
• Make sure the production and business situation, the financial situation of the business to make appropriate lending decisions.
• Work Process Appraisal of Construction Investment Projects

Benefits of the appraisal of construction investment projects:

• Overall analysis of each investment option helps investors choose the most effective and quality solution.
• Assess the necessity of the project related to the following issues: Economy, society, technology used, environmental sanitation.
• Evaluating financial options, the ability to recover capital to help project sponsors make the right and most accurate decision on whether to lend capital or not.