Credit Approval Chain Module

The Approvals module (/applications/queue) coordinates the institutional credit committee workflow. It implements a multi-stage approval chain governed by delegated authority matrices, enforces the four-eyes principle, and runs automated underwriting pre-checks before any loan can be sanctioned.

1. Key Definitions & Concepts

2. Navigating the Approval Queue (/applications/queue)

Managers and Directors access pending credit files through the unified committee queue:

┌─────────────────────────────────────────────────────────────────────────────────────────────────┐
│ Credit Approval Queue                                                      [ Batch Review ]     │
├─────────────────────────────────────────────────────────────────────────────────────────────────┤
│ [ All (14) ] [ In My Queue (5) ] [ Manager Stage (8) ] [ Director Stage (4) ] [ Returned (2) ]  │
├────────────┬──────────────────┬──────────────┬─────────────┬─────────────┬───────────┬──────────┤
│ App #      │ Borrower         │ Product      │ Amount      │ Tenor       │ DSR %     │ Officer  │
├────────────┼──────────────────┼──────────────┼─────────────┼─────────────┼───────────┼──────────┤
│ APX-001284 │ Grace Mwangi     │ SME Growth   │ KES 750,000 │ 12 Months   │ 38.2%     │ K. Brian │
│ APX-001283 │ David Kibet      │ Boda Boda    │ KES 180,000 │ 18 Months   │ 42.0%     │ A. Chebet│
│ APX-001281 │ Mary Atieno      │ Quick Cash   │ KES 35,000  │ 3 Months    │ 24.5%     │ K. Brian │
│ APX-001279 │ Samuel Njoroge   │ Agribusiness │ KES 450,000 │ 6 Months    │ 49.1% ⚠️  │ P. Mwita │
└────────────┴──────────────────┴──────────────┴─────────────┴─────────────┴───────────┴──────────┘

Table Indicators

• App #: Clickable application identifier prefixed with APX-.
• Borrower: Client name with KYC verification badge (Green shield for Verified).
• DSR % (Debt Service Ratio):
  • Green ($\le 40%$): Strong repayment capacity.
  • Amber ($40.1% - 50%$): Moderate capacity, caution advised.
  • Red ($> 50%$): High risk, exceeds prudent leverage limits.
• Action Buttons: Direct quick link to Review Dossier.

3. Delegated Lending Authority Matrix

The platform automatically determines the required committee stages based on requested principal and institutional configuration (org.authorities):

4. The Dossier Review Interface (/application/:hex)

Clicking an application opens the comprehensive digital credit file, organized into clear evaluation tabs:

1. Overview & Requested Terms

• Borrower personal profile, portrait photograph, National ID number, and verified contact details.
• Loan product parameters: principal, interest calculation method (flat vs declining), repayment interval, tenor, and upfront deductions.
• Net loan proceeds preview (Disbursement amount after processing fee deductions).

2. Automated Checklist Panel (<application-checks>)

Before committee members can approve, the system evaluates all institutional gates:

• ✅ KYC Verification: Client KYC status is verified.
• ✅ Tier Limit: Requested KES 350,000 is within Standard Tier ceiling (KES 500,000).
• ✅ Blacklist Clearance: Neither borrower nor listed guarantors appear on the institutional blacklist.
• ✅ Clean Portfolio: Borrower has no delinquent facilities or open write-offs.
• ⚠️ Collateral Coverage Warning: Pledged motorbike forced sale value covers 115% of facility (institutional preference is $\ge 130%$).

3. Financial Appraisal & Repayment Capacity

• Declared Monthly Income: Extracted from business cashflow and verified bank/M-Pesa statements.
• Monthly Living & Operating Expenses: Inventory replenishment, rent, household expenses.
• Proposed Installment: Monthly debt commitment under this facility.
• Net Disposable Margin: Residual cashflow buffer remaining after debt servicing.

4. Pledged Collateral & Guarantors

• Detailed asset register line items: vehicle logbook registration, chassis numbers, verified title parcel numbers.
• Certified valuer reports and site inspection photos.
• Guarantor profiles: identification, verified contact numbers, and total guaranteed exposure across other active loans.

5. Attached Supporting Documentation

• High-resolution viewer for scanned documents: National ID, M-Pesa 6-month statement, local trade license, business site photos.

5. Making a Decision

The decision bar is positioned fixed at the bottom of the review dossier:

┌─────────────────────────────────────────────────────────────────────────────────────────────────┐
│ [ ✕ Reject Application ]      [ ↩ Return for Remediation ]          [ ✓ Approve Application ]   │
└─────────────────────────────────────────────────────────────────────────────────────────────────┘

1. Approving the Application (Green Button)

1. Click Approve Application.
2. A confirmation modal appears showing your digital signing credentials and the target action:
   • If you are a Branch Manager on a loan under KES 500k: “This will sanction the loan for disbursement.”
   • If the loan requires Director review: “This will record Level 2 recommendation and forward to Executive Director queue.”
3. Enter your optional signoff memo (e.g., “Client business verified at Gikomba market. Collateral logbook safely lodged in branch safe. Approved.”).
4. Click Confirm Approval. The state transitions immediately and an audit entry is posted.

2. Returning for Remediation (Amber Button)

If documents are incomplete, illegible, or terms need adjustment:

1. Click Return for Remediation.
2. Enter the Mandatory Return Reason (e.g., “M-Pesa statement only covers 3 months instead of mandatory 6 months. Please request updated PDF statement from client and resubmit.”).
3. Click Return to Draft.
4. The application reverts to the originating loan officer’s draft queue with your note highlighted in an amber banner.

3. Rejecting the Application (Red Button)

If the credit committee decides the borrower represents unacceptable risk:

1. Click Reject Application.
2. Select the Primary Rejection Category:
   • Inadequate Cashflow / Capacity
   • Insufficient Collateral / Guarantors
   • Adverse Credit History / Over-indebtedness
   • Suspected Fraud / Unverifiable Information
3. Enter the detailed credit committee minutes.
4. Click Confirm Rejection.
5. The application is permanently closed. The system dispatches an automated polite adverse SMS to the applicant.