What is collateral instrument in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: collateral instrument

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: An umbrella term for collateral, guarantees, and credit derivatives.

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• Key Concepts: 
  Collateral instrument is a term used in the SAP Credit Risk Management (FS-BA-PM-CR) component. It refers to a type of security that is used to guarantee a loan or other financial obligation. This security can be in the form of cash, stocks, bonds, or other assets. The collateral instrument is held by the lender as a guarantee that the borrower will fulfill their obligations. 
  
  How to use it: 
  In SAP Credit Risk Management, collateral instruments are used to secure loans and other financial obligations. The lender will hold the collateral instrument as a guarantee that the borrower will fulfill their obligations. The lender can then use the collateral instrument to recover any losses if the borrower fails to meet their obligations. 
  
  Tips & Tricks: 
  When using collateral instruments in SAP Credit Risk Management, it is important to ensure that the collateral instrument is sufficient to cover any potential losses. It is also important to ensure that the collateral instrument is properly secured and monitored so that it can be used if necessary. 
  
  Related Information: 
  Collateral instruments are just one of many tools used in SAP Credit Risk Management. Other tools include credit scoring, credit limits, and credit monitoring. All of these tools are used to help manage risk and ensure that loans and other financial obligations are fulfilled.