Financial Risks and Managing Debt from a Biblical Perspective

Financial Risks and Managing Debt from a Biblical Perspective

Financial Risks and Managing Debt from a Biblical Perspective.

Financial Risks and Managing Debt from a Biblical Perspective: Financial risk is a collection of various types of risks that are related to financing, which include transactions such as the risk of loan default.

There is the insecurity that money will not be recovered, and there is the possibility of financial loss.

There are various financial risks that business encounter during operation this include credit risk which is the associated with debt default the business in such a case a business is at risk of losing the principal amount and the interest that could have accumulated thus reducing the cash flow and increasing the cost of operation.

Managing debt is the

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In managing debt, the bible states that the rich must should enslave the poor borrower who is unable to pay the loan and work for the master until he recovers all the amount that he had given and the interest that he was to collect.

Therefore, businesses have the obligation of correcting their debt regardless of the economic status of the borrower (Abraham, 2013, p. 115).

Business should apply the teachings of the bible to avoid falling in financial risks, and get the knowledge of how to correct the debt from their clients. However, the Bible warns business and prohibits them from lending money to individuals who are unable to repay the loan.

Reference

Abraham, A. (2013). The trend following bible: How professional traders compound wealth and manage risk. Hoboken: John Wiley & Sons, Inc.

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