This course explains Subsidy Dependency Risk and how the risk arising from borrower reliance on subsidies to sustain affordability and performance outcomes is evaluated within Agri & Rural Commercial Credit. It covers the key dimensions of affordability, performance outcomes, subsidies, and insurance arrangements affecting viability and outcomes, emphasizing the need for structured assessment, clear boundary definition, and independent validation before credit decisions are finalized.
The course also distinguishes Subsidy Dependency Risk from broader portfolio diversification strategies, and highlights its role within Schemes, Subsidy & Insurance Risk, where the credit analyst executes assessments, completes documentation, and flags exceptions for manager review, including escalation to credit committees where required.