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Hi sir John
what does revolving credit facilities mean? are they like SPVs (special purpose vehicle)?
is there any islamic finance which become part of such facilities.they mentioned this in ratios question. and i am trying to search on it but didn’t get any reasonable answer.
why they mention that in question that High K would benefit from revolving credit facilities?
It is nothing to do with Islamic finance.
Suppose you were to borrow $1,000 and repay $100 a year. After 10 years you would have repaid and then you might consider borrowing more. That is the way normal borrowing works.
With revolving credit, you borrow $1,000, you repay $100 in the first year, but you are then entitled to borrow another $100. That way you can always be borrowing $1,000.
so its more like the credit card facilities. we pay each month but we have limit up to which we can use it?
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