We know that occasionally people make mistakes. Everybody’s human after all. Sometimes loans are disbursed when they shouldn’t have been, or a loan is approved and you discover afterwards that the client didn’t fit your lending criteria. That’s why we’re excited to announce that the Musoni System enables you to configure ‘credit committee’ loan appraisal checks that are automatically applied prior to any loan approval or disbursement. These checks enable you to ensure that loans cannot be disbursed unless certain pre-requisites are met, reducing your risk and standardising the decision making across all of your users. Examples include warning you if a client applying for a loan is part of group with outstanding arrears, or blocking a disbursement if the client has previously had written off loans.
To activate a check, and to determine the severity of the check itself, go to Configuration>Products and click on the Credit Checks tab, as shown in the image below:
By clicking ‘View’, you can configure the severity of the credit check, ranging from a simple warning through to blocking the loan disbursement entirely, as shown in the image below:
Once you have clicked save, the checks will be applied to any loan of the product type you’ve set up, as they go through the approval or disbursement processes. For example, if you have activated the Written-Off loans check, and given it the severity level “Block Loan” the system will not allow you to disburse any loans to clients who have a written off loan already.
If you try and approve/disburse a loan that fails a check, you are given a warning on the loan appraisal screen, as shown on red below:
As you can see in the screenshot above, because the client already has a written off loan, you are shown an error message and the option to Approve has been hidden. This means that you can enforce your company’s lending policy from head office, and minimise the risk of different users making mistakes when disbursing or approving loans.