Abstract:
This project report is about influence of credit risk on project financing. We have selected
SAIF Group of Companies as our organization for project. We have gathered financial
data from SAIF Group and applied our research on it. We have explained project
financing and credit risk in detail and further we have studied and described the factors
which can affect the project financing. The important factor in this concern is interest rate
which affects the oil prices directly and oil prices are the indicators which influence the
economy. The second most important factor in this concern is the fluctuation of oil
prices, due to this we can also give recommendation that we can go for hedging the oil
related contracts to overcome the risk to avoid the failure of project because the oil prices
can not only have direct effect on the project financing but can also effect all of the other
factors. Because of this direct relationship with all of these factors we have studied and
observed the failure of different kind of projects. The third important factor in this
concern is Sovereign risk, it is the risk associated with the foreign money rating of the
country where the project is positioned. A supreme currency rating indicates the supreme
government’s potential and enthusiasm to its commitment to service liability on time and
in their completely. We have used some financial tools to access the credit risk of
different projects. With the help of this report one can easily identify the risk associated
with the equity of the project to be financed, the factors which are increasing this
associated risk and last but not the least, it gives the way by which organizations can
minimize the credit risk associated with different projects.
