Credit analysis is a critical process used to assess the financial health and creditworthiness of individuals or businesses before extending loans or credit facilities. It involves evaluating factors such as income, cash flow, repayment capacity, credit history, and overall financial stability to ensure informed and responsible lending decisions.

By conducting a thorough credit analysis, lenders can determine the risk involved and structure financing solutions that align with the borrower’s financial profile. This helps in minimizing defaults while enabling clients to access the right amount of credit to meet their needs.