What is tranche index in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: tranche index

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: Key figure that is used in the context of a securitization to specify the sequence of individual tranches.

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• Key Concepts: 
  Tranche index is a component of the Credit Risk Management (CRM) module in SAP Financial Services (FS-BA-PM). It is used to measure the risk of a loan portfolio by assigning a numerical value to each loan. The tranche index is calculated by taking into account the creditworthiness of the borrower, the amount of the loan, and other factors. 
  
  How to use it: 
  The tranche index is used to assess the risk of a loan portfolio. It is calculated by taking into account the creditworthiness of the borrower, the amount of the loan, and other factors. The higher the tranche index, the higher the risk associated with the loan portfolio. The tranche index can be used to determine which loans should be approved or rejected, as well as to set appropriate interest rates for each loan. 
  
  Tips & Tricks: 
  When calculating the tranche index, it is important to consider all relevant factors such as creditworthiness, loan amount, and other factors. Additionally, it is important to keep in mind that a higher tranche index indicates a higher risk associated with the loan portfolio. 
  
  Related Information: 
  The tranche index is just one component of Credit Risk Management in SAP Financial Services (FS-BA-PM). Other components include credit scoring, credit limit management, and collateral management. Additionally, there are various tools available in SAP FS-BA-PM that can be used to manage credit risk more effectively.