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| Rating >> Financial Sector Rating >> Housing Finance Company (HFC) |
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CARE has developed a comprehensive methodology for credit rating of debt instruments issued by HFCs. Quantitative factors include Capital Adequacy, Asset Quality, Cost of Funds, Asset Growth, Liquidity and Earning Quality. Evaluation of quantitative factors is done not only of the absolute numbers and ratios, but their volatility and trend as well. The attempt is to determine core, recurring measures of performance. CARE also compares the entity’s performance on each of the above-discussed parameters with its peers. Detailed inter-firm analysis is done to determine the relative strength and weaknesses of the entity in its present operating environment and any impact on it in future.
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Qualitative factors include ownership, management quality, risk management, compliance with statutory requirements, accounting quality, size and market presence.
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