Configuring Loan Products & Credit Rules

The Loan Product Configuration Flow (/products/new or /products/:hex/edit) establishes the financial rules, interest calculation models, fee structures, and underwriting constraints for credit facilities offered by BiiTrust.

1. Governance & Permissions

• Required Privilege: products: create / products: edit (strictly reserved for System Administrators and Executive Directors).
• Rule-Driven Engine: Rather than hardcoding business rules into software code, product rules are stored as structured JSON parameters. The origination rail evaluates these constraints in real time when loan officers submit applications.
• Persistence: Work-in-progress product configurations automatically save to device local storage (bii.product.create) so edits are never lost if the browser tab is accidentally closed.

2. The 5-Step Product Configuration Rail

[ 1. Basics ] ──► [ 2. Interest ] ──► [ 3. Charges ] ──► [ 4. Limits & Rules ] ──► [ 5. Review ]

Step 1: Basics (#basics)

Define the core loan identity and lifecycle rhythm:

Step 2: Interest Model (#interest)

Configure pricing and margin spreads:

1. Rate Kind:
   • fixed: All borrowers receive the exact same contractual annual interest rate.
   • floating: Linked to Central Bank benchmark rates or inflation indexes.
   • matrix: Tiered rate based on borrower credit score or collateral haircut.
2. Annual Nominal Rate (%): The headline annual interest percentage (e.g., 18.0% p.a.).
3. Spread Minimum / Maximum: Allowable rate variance that a Branch Manager may adjust during underwriting.

Step 3: Charges & Late Penalties (#charges)

Establish revenue fees and delinquency deterrents:

• Upfront Flat Fee (KES): Fixed administrative charge (e.g., KES 1,500) deducted at disbursement.
• Percentage Appraisal Fee (%): Variable origination fee (e.g., 2.5% of disbursed principal).
• Penalty Method:
  • per_installment: Daily penalty computed strictly on the unpaid overdue installment amount.
  • balance: Daily penalty computed across the entire overdue loan principal balance.
• Penalty Annual Rate (%): Late payment surcharge rate (e.g., 12.0% p.a.).
• Grace Period (Days): Buffer window (typically 3 days) after the installment due date before penalty accrual begins.

Step 4: Limits & Underwriting Constraints (#limits)

Protect portfolio quality by enforcing programmatic boundaries:

• Minimum Facility Amount: Lowest allowable loan size (e.g., KES 10,000).
• Maximum Facility Ceiling: Highest allowable loan size (e.g., KES 500,000).
• Max Concurrent Facilities: Default 1 (prevents a borrower from taking multiple simultaneous loans under this product).
• Rule Gates (Toggle Cards):
  • Require KYC Tier: Enforce standard or enhanced minimum tier.
  • Require Collateral: Blocks submission if pledged collateral FSV is $< 100%$ of principal.
  • Require Guarantors: Enforce minimum 1 or 2 verified guarantors.
  • Mandatory Credit Bureau Check: Requires clean CRB clearance certificate.

Step 5: Live Amortization Review (#review)

Before activating the product, the screen renders an interactive simulation on a sample KES 100,000 loan:

• Periodic Installment Amount: Displays exact KES per week or month.
• Total Interest Yield: Highlights gross interest revenue generated.
• Effective Annual Rate (EIR): True financial yield calculation.
• Sample Amortization Table: Full installment-by-installment projection.
• Publish Product: Click Activate Product to deploy into the live origination catalog.