JV Related Party Risk arises when joint venture partners, suppliers, customers, investors, or contractors are connected to the borrower, promoters, or group entities. In MSME underwriting, related-party arrangements can be genuine business structures, but they may also create pricing concerns, fund diversion, conflicts of interest, or weak enforceability. For example, a borrower may route sales through a promoter-owned JV on terms that shift profits away from the borrowing entity. This matters because the lender assesses repayment from the borrower’s cash flows, and related-party structures can distort those cash flows. The common caution is to identify ownership links, board control, transaction terms, receivables/payables, guarantees, and whether arrangements are at arm’s length.