The short answer
Most loan default risk is controlled before the loan is paid out and in the first weeks of arrears. A system helps by making the appraisal rules the same for every officer, by recording guarantors and collateral against each loan, and by showing arrears early enough to act.
Before the loan: appraisal
- Products set the limits: maximum amount, multiples of deposits, term, rate and charges.
- Appraisal checks the application against the product, the member's deposits and existing loans.
- Guarantors and collateral are recorded against the loan.
- Approval runs through a workflow, recorded in the system.
This is a rules-based appraisal. SaccoFlow 365 does not include an automated credit scoring model. A scoring model can be built on Business Central data and Azure services as a separate project, and should be tested against your own repayment history before you rely on it.
After the loan: schedules, repayments and checkoff
- One schedule engine produces the repayment schedule at disbursement.
- Repayments are allocated in a fixed order: penalty, interest, principal and insurance.
- Employer checkoff schedules go out, remittances are imported and matched, and variances are visible the month they arise, not at the year end.
Early warning: arrears
- Arrears are shown in buckets by loan, branch, product and officer.
- Loans are classified by risk according to the SASRA categories, with provisioning calculated from the loan ledger.
- Demand notices can be produced from the arrears list.
- The credit manager's role center shows what needs attention today.
Recovery
Recovery can come from the member's deposits, a FOSA account or the guarantors, with loans rescheduled, topped up or written off through approved processes. Guarantor substitution is recorded when a guarantor leaves or withdraws. Each step is logged, so the board can see what was recovered, from whom and on whose approval.
What to measure
| Measure | Why it matters |
|---|---|
| Portfolio at risk by bucket | The earliest sign of trouble |
| Loans past due after a checkoff month | Employer or payroll problems |
| Guarantor cover per loan | Whether security is real |
| Provisioning against the SASRA categories | Whether the books show the risk |
| Recovery by source | Where recoveries actually come from |
SaccoFlow 365 is in preview and is introduced through a pilot with your data. To scope one, book a consultation.
Frequently asked questions
Does SaccoFlow 365 do credit scoring?
No. It applies rules-based appraisal against the product, deposits, guarantors and collateral. A scoring model can be built separately.
How are non-performing loans tracked?
In arrears buckets, with SASRA risk classification and provisioning calculated from the loan ledger.
How is recovery handled?
From deposits, FOSA accounts or guarantors, with rescheduling, top-up and write-off through approved processes.