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The construction of project financing relies on potential money flows for repayment from the project finances. The assets or legal rights held beneath the project act as collateral for that finance.

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This is actually the financial institution's power to meet up with obligations that threaten its money existence. Conversely, it is the insufficient marketability belongings that cannot be introduced or offered instantly all through crises to stop decline. It happens when a fiscal institution are not able to satisfy its brief or prolonged-expression debt.

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