What is local funding in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: local funding

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: Receivables from the sovereign of incorporation that are in the domestic currency. &EXAMPLE& If receivables are due from the sovereign of incorporation and in the domestic currency, a lower risk weight may be permitted.

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• Key Concepts: 
  Local funding is a component of the Credit Risk Management module in SAP Financial Services (FS-BA-PM-CR). It is used to manage the risk of a customer defaulting on their loan or other financial obligation. Local funding allows a company to set up a local funding pool, which is a pool of funds that can be used to cover any losses due to customer defaults. 
  
  How to use it: 
  Local funding can be used to manage the risk of customer defaults by setting up a local funding pool. This pool of funds can be used to cover any losses due to customer defaults. The local funding pool can be set up with different levels of risk, depending on the company's needs. The local funding pool can also be used to provide additional liquidity for customers who are unable to meet their financial obligations. 
  
  Tips & Tricks: 
  When setting up a local funding pool, it is important to consider the level of risk that is acceptable for the company. It is also important to consider the liquidity needs of customers and how much money should be allocated for each customer. Additionally, it is important to monitor the performance of the local funding pool and make adjustments as needed. 
  
  Related Information: 
  The Credit Risk Management module in SAP Financial Services (FS-BA-PM-CR) provides additional features and tools for managing credit risk, such as credit scoring and credit limit management. Additionally, SAP provides a range of services and solutions for managing credit risk, such as credit monitoring and analytics.