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Lending
Last updated April 9, 2024
There are key lending business activities to monitor to ensure your lending business is on the right track. Generate reports of these activities and review them daily for best results. Lending is serious and sensitive business and must be conducted with the utmost attention to details. The last thing you want is to have put in so much effort into setting up your business but have poor operational discipline. Lack of effective monitoring and control can run your lending business into the ground faster than you can keep up. Especially as a digital lender. The use of technology increases the ease of access to your loans and will most likely result in more activity than running solely offline.
When it comes to lending, your priority is to get your money back and keep your non-performing loans (NPL) ratio low. To ensure this is on track, you have to generate reports to monitor loan performance daily. This report will give you insights into the number of loans repaid and those that have yet to be repaid. Bonus points is that the results can also be grouped according to borrowers’ demographics and characteristics. This way you can analyze which borrowers are more likely to repay and adjust your loan decision system to accommodate more of those types of borrowers.
Consequently, this analysis should be done as often as possible so that you can intensify efforts to ensure repayments. Note that no matter how poor the results might be, you should focus on recovering loans ethically.
This is your top recurring activity as a lender and it’s only sensible to record and review this daily. It’s imperative to be able to track all the loans you give out on a daily basis. This includes the borrower’s details, loan details (amount, interest rate and tenor) and due dates.
You can compare disbursements across certain periods and ask important questions. Plus, you need to know just how many loans you are giving out on a daily basis. Are you spreading your resources thin? Or should you be giving out more loans?
A comprehensive loan request report gives you a breakdown of all loan requests that have passed through the system. This allows you to monitor the average approval rates. .
For a manual approval system, you should check your loan requests queue as often as possible. It doesn’t bode well if borrowers get the impression that your loan process is slow and unable to cater to their needs.
Your work isn’t over until you’re paid up for the day. It’s not the best idea to rely on borrower’s to remember their due date and repay on time. Even if their memory doesn’t fail them, their will might. Apart from the usefulness of daily due loans reports to inform you of how much you have in unpaid loans, they will also come in handy in knowing who to follow up with and pursue to ensure loans are repaid when due.
If a borrower fails to repay on the due date, their loan is automatically marked as a past due loan. You need to monitor this even more closely to prevent loan default.
It goes without saying that borrowers will process repayments online if you operate digitally. This means there might be some technical errors once in a while that may bounce payments and give the impression of loan default.
This is where repayment transaction performance comes in. How many loan repayments were successful? How many failed repayment attempts occurred? Why? This is a very important report and can prompt proactive support for customers who may be experiencing issues with repayment. A well done report can help you pinpoint specific card, wallet and system errors that prevented repayment.
These reports from your lending business can be summarized in a business dashboard
The importance of a business dashboard can’t be overemphasized. A dashboard can give you the top information about your business performance at a glance. This comes in very handy for quick reviews of the reports above and a range of other indicators including user signups.
Dashboards give a visual representation of all these indicators which makes it easier to get the gist of how well or poorly your business is performing in one look. This often prompts a deeper dive and corrective action if need be. Additionally, if you have introduced new loan products, made changes to your loan process or even increased your marketing activities, your business dashboard can show if these activities have had any impact on general performance.
There are definitely not enough hours in a day to manually generate and update the necessary reports to monitor your business performance. It’s an impossible task. But Lendsqr is up to the task. Every lender has access to several detailed reports that keeps you apprised of all key happenings in your business at all times. The system generates these reports automatically and are therefore as accurate as possible. There is no room for human error.
All you have to do is sign up for free and start lending on Lendsqr to access these reports. You can also reach out to [email protected] to find out more about the reports available to you.
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