Automating Corporate Credit Assessment: From Credit Paper to Committee Decision
By WEFI · Published · Updated · 3 min read
Corporate credit process
- Facility request
- Financial analysis
- Credit paper
- Authority routing
- Committee decision
- Documentation
- Drawdown
- Covenant monitoring
- Renewal
Why corporate credit is slow
A corporate or large SME facility typically passes through relationship management, credit analysis, risk review, legal and one or more approval levels before drawdown. In many banks:
- financial statements arrive as PDFs and are re-typed into spreadsheets;
- the credit paper is assembled by hand from several sources;
- the approval route is worked out each time from the authority matrix;
- committee decisions and conditions are recorded in minutes, not against the facility; and
- covenants are tracked in a separate spreadsheet, if at all.
The client experiences weeks of silence, and the bank carries risk that is hard to see.
What should be automated — and what should not
| Activity | Automate | Keep human |
|---|---|---|
| Collect financial statements and documents | Requests, reminders, storage against the facility | — |
| Spread financial statements | Structured capture of statements and ratio calculation | Interpretation of results |
| Credit paper | Assemble client, exposure, collateral, limits and analysis into a standard template | Analyst's recommendation and narrative |
| Approval routing | Determine authority from amount, risk grade and product via governed rules | The decision itself |
| Committee | Agenda, papers, quorum, recorded decision and conditions | Deliberation |
| Conditions and covenants | Track conditions precedent and covenant tests with due dates | Waiver decisions |
| Renewal | Trigger renewal review before expiry | Renewal decision |
The data model matters
Corporate credit becomes manageable when a few entities are modelled explicitly and connected:
- Facility — the approved credit line with its terms
- Deal — a package of facilities for one client or group
- Credit committee case — the decision record, with conditions
- Covenant — each obligation, its test and its status
- Limits and collateral — exposure and security linked to the facility
With these in place, anyone with access can answer: what has this client been approved for, under what conditions, against which collateral, and is anything in breach?
Governed authority
Approval authority should come from rules, not memory. Encoding the authority matrix — by amount, risk grade, product and sector — as versioned decisions means every application is routed correctly and the bank can show which rule applied at the time.
Measuring improvement
Once the process runs on a model, the bank can measure time from request to decision, time in each stage, rework, and the number of facilities with overdue conditions or covenant tests.
How WEFI approaches it
WEFI Loan OS manages credit facilities, deals, financial statements, credit committee cases and sittings, covenants, waivers and facility renewal, using limits and collateral from WEFI EDOS and approval authority from WEFI Policy. See the corporate banking solution or request a demo.
Frequently asked questions
- What is a credit paper?
- The document presenting a credit request for decision: client background, facility requested, financial analysis, risk assessment, security, and the analyst's recommendation.
- What is a covenant in corporate lending?
- A condition the borrower must meet under the credit agreement, such as maintaining a financial ratio or submitting statements by a deadline.
- Can corporate credit decisions be automated?
- The decision itself should remain with authorised people. Automation handles document collection, analysis structure, routing to the right authority, recording decisions and monitoring conditions.
- How does IFRS 9 relate to corporate credit monitoring?
- Changes in credit risk — including covenant breaches and deterioration — affect IFRS 9 staging and expected credit loss provisions.