New Register here for RBI, SEBI & NABARD strategy workshop! April 9 at 7 PM

    Question

    What is project financing?

    A A form of financing where the borrower's creditworthiness is the main consideration Correct Answer Incorrect Answer
    B A form of financing where the lender's creditworthiness is the main consideration Correct Answer Incorrect Answer
    C A form of financing where the project's cash flow is the main consideration Correct Answer Incorrect Answer
    D A form of financing where the project's collateral is the main consideration Correct Answer Incorrect Answer

    Solution

    Project financing is a form of financing where the primary consideration for lending or investment is the project's cash flow. In project financing, the financial viability of the specific project, rather than the overall creditworthiness of the borrower or lender, is the central focus. Lenders or investors assess the projected income, cash flow, and financial performance of the project to determine whether it can generate sufficient funds to repay the financing and generate a return on investment.

    Practice Next