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Preparation of Business Process Document and Credit Scoring Model

The Assignment
The client is one of the leading players in urban micro-finance in India. The client has been at the forefront in leveraging the power of Information Technology for process improvement. MaGCTM was engaged to prepare a business process document for its Enterprise Finance Division. MaGCTM was also tasked with developing a scientific model for credit appraisal of loan proposals. The business process document had to be developed for a TO BE environment keeping in view the ongoing implementation of a CRM solution and a Core Banking Solution.

MaGCTM Approach
The challenge was to prepare the process document with the level of detailing required for implementing a technology solution for process automation. MaGCTM applied its LAMPTM tool for process mapping. For the Credit Scoring Model, the challenge was to convert as much of the subjectivity in loan appraisal into objective, measurable parameters so that the overall model gave consistent results across different customer and product types.

The Output
The output was a comprehensive process document which contained process flows, detailed descriptions, guidelines, checklists and document formats. Process metrics were identified for each process as indicators of process efficiency. The reengineered processes are expected to reduce the TAT for loan appraisal by 33%. The Credit Scoring Model gave a stage by stage approach to credit appraisal with the credit score guiding the appraiser at each stage. The Credit Score Model was piloted on a few cases and found to be consistent.

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