Credit Origination Solutions

Credit Origination is a term that means lending to individuals and corporate customers. Lending is one of the primary functions of financial institutions around the world. A thorough scrutiny before sanctioning the loan, proper follow-up, and monitoring after loan sanction guarantees profit and reduces debts. This is the bottom-line mission of every loan department.

Business Challenges That You Face

Banks face some compelling business reasons for upgrading their commercial risk ratings systems:

• Credit heads and general managers need a system-driven rule-based automatic loan approval process.
• The credit applications are scattered and there is no centralized system that shows the status of the proposals (whether sanctioned, rejected, or in process) at the click of a mouse.
• There is no centralized system to instantly view which loan officer or sanctioning authority (adjudicator) is handling any given proposal.
• There is no mechanism to store or retrieve the rejected or deferred proposals for resubmission. When such proposals are processed from the beginning or when considering renewal or enhancement proposals, prior year data has to be re-entered by the loan officers. There is no provision for auto-population from the existing credit. This involves duplication of work and loss of valuable staff hours.
• There is no mechanism to identify, accept, or reject a proposal based on eligibility norms. There are instances where the officers and managers spend considerable time and then reject the proposal based on pre-requisites or basic eligibility norms. That is, the knockout conditions are not verified in the initial stages.
• In some proposals the ownership details are not filled up or incomplete. There is no automated system to validate whether ownership details are completed or not.
• Loan officers use cut and paste commands to copy prior year information in the current year proposals. This leaves scope for a lot of errors.
• The credit proposals are submitted without providing vital information, for example, regarding balance outstanding in the accounts. In some cases, old balances are furnished. There is no centralized mechanism to gather the outstanding balance amount from other systems in the bank automatically.
• Environment risk is not assessed in the credit proposals.
• There is no mechanism for automatic generation of alerts and email notifications to the specific users depending on the operations done.

What We Offer You

The above list is a sample of requirements that we receive from our client companies. We hold the record of delivering solutions to most of these requirements to an American banking corporation within just eight weeks. We have developed two comprehensive credit processing (origination) systems, one for retail SMEs with loans less than $100 million and another system for wholesale customers such as banks, sovereigns, and SMEs with larger credits of above $100 million.

All possible information is gathered in the two applications and the information is then used for credit processing. Final adjudication is made by the sanctioning authority whether or not to sanction the loan recommended by credit officer. The steps involved in processing of a loan application in a credit origination system can be graphically represented as in the figure below:

Credit Origination System - Your Assured Benefits

For Retail SME Customers

Kumaran's comprehensive Credit Origination and adjudication system performs these functions in alignment with the bank's credit risk policy:

• Credit risk origination
• Analysis
• Risk assessment
• Risk measurement
• Risk rating (PD and LGD)
• Pricing
• Adjudication
• Non-performing assets management
• Credit risk review
• Credit administration
• Credit monitoring

For Wholesale Customers

Our powerful Credit Origination and adjudication system for huge banking corporations, sovereigns and SMEs with larger credits performs these functions with satisfactory transparency:

• Credit risk origination
• Analysis
• Credit risk assessment based on industry financial templates
• Credit risk measurement
• Risk rating (PD and LGD)
• Pricing
• Country risk assessment
• Cross-border risk assessment
• Syndication analysis