Step-by-Step: Deciding an Application

The Application Decision Flow (/application/:hex/decide) is used by Branch Managers, Risk Officers, and Executive Directors in /applications/queue to evaluate, sanction, return, or reject credit dossiers.

1. Multi-Tier Underwriting Ladder & Four-Eyes Policy

Underwriting authority is segmented by sanction limits (org_authorities):

The Four-Eyes Rule

• A loan officer cannot approve an application they originated.
• An approver who signed an earlier stage cannot sign a subsequent stage.
• System enforcement is immutable: any attempt to self-approve results in a 409 four_eyes rejection.

2. The Three Steps of Deciding

Step 1: The Dossier & Policy Audit

• Application Overview: Inspect borrower name, National ID, requested principal, tenor, interest method, and stated economic purpose.
• Endorsement History: Reviews earlier signatures in the chain (e.g., Loan Officer’s initial submission memo and timestamp).
• Automated Check Strip:
  • kyc: Validates that borrower’s KYC verification is active and within expiration horizon.
  • blacklist: Confirms 0 matches against fraud and regulatory watchlists.
  • exposure: Checks cumulative borrower exposure across all active facilities.
  • dpd: Asserts 0 overdue days on open facilities.
  • collateral: Asserts forced-sale valuation meets or exceeds required coverage ratio.
• If any mandatory check fails, the Approve option is locked.
• Click Continue.

Figure 5.1: Step 1 Underwriting dossier review displaying borrower facts, officer memo, and policy check strip.

Step 2: Formulating the Underwriting Decision

Select one of three binding operational rulings:

┌─────────────────────────┬─────────────────────────┬─────────────────────────┐
│       [ APPROVE ]       │        [ RETURN ]       │        [ REJECT ]       │
│ Advances to next stage  │ Back to officer desk    │ Application declined    │
│ or to disbursement      │ with specific fixes     │ definitively            │
└─────────────────────────┴─────────────────────────┴─────────────────────────┘

1. If Approving:

• Enter optional Underwriting Covenants & Conditions (e.g., “Approved subject to original motor vehicle logbook and certified valuation deposited in branch vault prior to disbursement”).
• If the application amount is within your delegation limit, it lands on status = 'approved'.
• If the amount exceeds your delegation limit, it advances to the next stage in the hierarchy (e.g., stage = 'director').

2. If Returning:

• Enter a mandatory Remediation Note specifying what must be amended (e.g., “Customer bank statement is missing page 4; please obtain a certified 6-month statement and resubmit”).
• The file reverts to status = 'draft' on the originating loan officer’s desk.

3. If Rejecting:

• Select the official Statutory Grounds for Rejection:
  • Insufficient cash flow / debt service capacity
  • Collateral or security valuation deficit
  • Unsatisfactory credit history / high external indebtedness
  • Incomplete, expired, or unverified KYC documentation
  • Policy violation / regulatory non-compliance
• Enter a mandatory Explanation Note that will be recorded in the audit trail.
• Click Continue.

Figure 5.2: Step 2 Selecting underwriting decision (Approve/Return/Reject) and entering covenants.

Step 3: Confirm & Digital Signature

• Read-Back Summary: Consolidates the decision, recorded covenants, and the resulting state.
• Statutory Acknowledgment: Check the mandatory box:
  • “I have read the dossier and credit policy checks, and I record my decision within my authorized delegation.”
• Sign Decision:
  • Click the action button (Green for Approve, Blue for Return, Red for Reject).
  • The digital signature logs to the audit register (system_audits).
  • When the final approval stage is signed, the application immediately displays a Disburse Funds button.

Figure 5.3: Step 3 Final digital signature signoff committing sanction and unlocking the disbursement button.