Question

Give a micro-financial risk analysis for the tourism sector in Barbados

Answer 1

Micro financial risk analysis for tourism-

• Credit risk is directly related to portfolio of the tourism sectors and MFI lends to the client where inherent risk is also associated.
• This risk has greater significance due to dealing with large number of tourists clients in Barbados.
• Transaction risk is related to individual borrower and delay in repayment of this will result in loss for the corporation.
• When client does not repay its loan then the MFI loses interest income. It will impact profitability position for the organisation.
• Mismanagement in cash flow statements will resulted in high payback period and accounts receivable aging. So that financial risk will increase for tourism sectors.
• Organisation's credibility also depends on the risk factors for which tourism business turnover is calculated on monthly basis.

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