01 / PUT IT INTO PRACTICE
Start with the action, not the algorithm
“Build a credit score” leaves too much undefined. “Identify applications that need additional review before a working-capital loan is offered” names an action. The latter gives the owner, risk lead and modeller a shared starting point.
- Origination: approval or referral, amount, tenure, pricing and security.
- Existing loans: account review, renewal, top-up and deterioration.
- Collections: cure, recovery amount and timing, prioritisation and restructuring review.
- Portfolio and growth: concentration, losses, return, funding and capital.
02 / PUT IT INTO PRACTICE
Choose an outcome and a clock
Default within a defined period, arrears in the next review window and recovery over a workout period are different targets. Set the observation date, outcome definition and horizon together. Information recorded after the decision date cannot be used as if it were already known.
03 / PUT IT INTO PRACTICE
Describe where the decision applies
MSME working capital, asset purchase and business-purpose loans against property can have different repayment sources. Record the segment, facility form, security and purpose. Do not assume a conclusion for one segment transfers to another merely because both are loans.
04 / PUT IT INTO PRACTICE
Agree what a useful answer looks like
Identify the existing rule or spreadsheet comparison where available. Define what will be inspected: calibration, review workload, cash-flow effects or decision stability. Decide how your team will recognise an improvement: more consistent reviews, a clearer view of contribution, or earlier visibility of funding pressure. Compare estimates with actual outcomes as those outcomes become available.
EXAMPLE / PUTTING IT INTO PRACTICE
Example decision brief: “At renewal, identify MSME instalment accounts requiring closer review over the next repayment window, using only evidence known on the review date. Compare the result with our current arrears-based review rule.” Your team can then agree the review criteria that fit its portfolio and credit policy.
WHAT YOU TAKE FORWARD