What is lending markdown in SAP FS-CMS - Collateral Management System?

SAP Term: lending markdown

• Component: FS-CMS

• Component Name: Collateral Management System

• Description: The discount in percentage, stipulated by law or used internally within a bank, to calculate the lending limit.

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• Key Concepts: 
  Lending markdown is a feature of the SAP FS-CMS Collateral Management System (CMS). It allows lenders to reduce the amount of collateral they require from borrowers in order to secure a loan. This is done by taking into account the risk associated with the loan and adjusting the collateral requirement accordingly. 
  
  How to use it: 
  In order to use the lending markdown feature, lenders must first assess the risk associated with the loan. This can be done by analyzing the borrower’s credit history, financial situation, and other factors. Once the risk has been assessed, lenders can then adjust the collateral requirement accordingly. The amount of collateral required will depend on the risk associated with the loan. 
  
  Tips & Tricks: 
  When using lending markdown, it is important to remember that it is not a one-size-fits-all solution. Lenders should take into account all relevant factors when assessing the risk associated with a loan and adjust their collateral requirements accordingly. 
  
  Related Information: 
  The SAP FS-CMS Collateral Management System also includes features such as automated collateral monitoring and reporting, as well as automated collateral valuation. These features can help lenders better manage their collateral requirements and ensure that they are adequately protected against potential losses.