Nonetheless, the key issue for the lender (creditor) at every level of finance – from the
most formal, most sophisticated to the most informal, simple, from wholesale to micro transaction
– is the likelihood of repayment (or default). For the borrower the key issue is the availability of
credit. And for both it is a matter of cost – transactions cost, risk premium, basic cost of funds.
Evaluation of risk is closely related to the trustworthiness of the borrower, and thereby to
corporate governance.