Abstract
This paper researched into why provision of collateral security by a bank customer is not a 100% guarantee that facilities sought for. The prerequisite for granting facilities includes: good character-integrity, strong financial capacity, repayment proposal, the purpose of the loan, the ratio/proportion of the loan/facilities sought-for to that of the security offered. The lending banker should also consider relevant accounting ratios. The real security is the integrity of the borrower; lending proposition must be favorable so that the question of security becomes secondary.
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