So far as the consumer’s creditworthiness assessment is worried, the difference between a “lender-focused” and a “borrower-focused” test created by the United Kingdom’s FCA is especially useful in determining the range of these an evaluation. A borrower-focused test involves the assessment of credit affordability, which is about how difficult it may be for the consumer to repay credit (FCA 2017a, p. 4) while a lender-focused test is limited to the assessment of credit risk. This dichotomy addresses the aforementioned problem that is mentioned the lender’s fascination with minimizing its credit danger might not constantly offer an acceptable motivation for the financial institution to produce that loan that will be into the needs regarding the customer debtor. To be able to guarantee accountable lending, consequently, the lender’s responsibility to evaluate the consumer’s creditworthiness, within our view, need by no means be restricted to the evaluation of credit danger and really should have the creditworthiness check that is borrower-focused.

At the moment, there isn’t any agreement that is general the perfect design of these a test, in specific in terms of defining the chance which it really is designed to deal with. More