THE PASSION HOSPITAL: CREDIT ANALYSIS FOR WORKING CAPITAL FINANCE

It was 5.30 pm of February 7, 2022 when Mr. Bhiman the head of Durgapur SME Loan Processing Centre, Commerce Bank was drawn to the loan application for working capital from The Passion Hospital. The hospital was provided with a term loan of Rs. 1.89 crore last June by the bank. Though Bhiman had more than 20 years of experience particularly in credit, he had no experience of providing credit to hospitals. He was of the view that hospitals get immediate payment from patients and would not need working capital. The application of the hospital had been forwarded by Ms. Anupama, head of Durgapur branch of the bank to him. Anupama was of the view that Passion Hospital has very good prospects and would be a valuable customer to the bank and hence the working capital loan of Rs. 1.40 crore as requested by the hospital should be sanctioned at the earliest. Bhiman called Mr. Sudhir, an efficient and experienced credit analyst and entrusted the task of analysing the loan application and submit a detailed report within a week.