Liquidity Coverage Ratio Assessment compares available liquid resources with short-term cash obligations. For MSME borrowers, the exact ratio may be adapted from internal policy rather than formal bank regulatory LCR, but the purpose is similar: to understand whether near-term payments can be met comfortably. Liquid resources may include cash balance, bank credits, unused working-capital limits, readily collectible receivables, or liquid investments, while obligations include EMIs, supplier payments, salaries, taxes, and interest. For example, a borrower with high receivables but low collections may show weak practical coverage. This assessment matters because short-term liquidity gaps can lead to cheque returns and overdue loans. The caution is to include only genuinely available and collectible resources.