C2MSME Foundations
Credit Dictionary
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UFCE Applicable refers to an MSME borrower having significant unhedged exposure to foreign currency fluctuations. This occurs when their revenue or expenses are denominated in a foreign currency, while their loan is in Indian Rupees, or vice-versa, without adequate hedging mechanisms in place. This poses a credit risk to the lender due to potential adverse currency movements impacting repayment capacity.