Portfolio Assessment

Portfolio Assessment in terms of “Credit Appraisal” is a process to ascertain the risks associated with the extension of the credit facility to a borrower. In other words the objective of credit appraisal is to access the credit risk and it aims at reducing the risk by applying precautions to each risk. It is generally carried by the financial institutions which are involved in providing financial funding to its customers.

Credit assessment methods are vital for NBFCs. The credit evaluation is a key factor for greater impact and success of an NBFC. Quality of a portfolio can be maintained by correct credit methodology and evaluating the product need. NBFCs find this as most challenging and crucial in building a healthy portfolio. 

Credit Evaluation Methodologies

Credit appraisal can be defined as assessing the ability and inclination of an individual or group to service the loan over a period of time. All financial institutions have their own unique method of calculating the loan eligibility. However things are not as hunky dory as they may seem, as loan eligibility evaluation criteria differs from lender to lender. Nonetheless, the nature of calculating remains more or less the same.

To conclude, on the eligible loan amount an individual’s deemed available income and repaying capacity are the two primary factors that decide the eligibility for a loan.

Factors to evaluate loan eligibility :

There is no single factor, or subset of factors, but rather it is all of the factors that combine to predict the creditworthiness of an individual or group. Credit scoring models do not necessarily make sense when we look at individual factors.

This is interesting to understand that all factors are interlinked to judge the “Creditability” of an individual or group


We help in designing the tool of “Credit Appraisal”. Consolidation of all factors both primary and supplementary is an art, which can be adopted and further polished though proper process and training. UNI involves in –

  • Setting of Credit Appraisal System. 
  • Standardization of process and System to follow.
  • Streamlining the process for reduction in processing time i.e. pre-sanction TAT.
  • Improving methods that are on par and expected by Industry.
  • Revising the factors for  appraisal.  
  • Verification and development of internal and external controls for Loan Portfolio Management.
  • Defining factors affecting repayment capacity and security cover.
  • Identification of Negative Professions.


  • Training and staff development in credit methodology.
  • Training on Credit Bureau Reports – How to read and utilise the report.


Team UNI is skilled to design tailor made “Credit Evaluation Methodologies”. We also:

  • Assist NBFCs with a holistic tool to build a sizeable portfolio with maximum utilisation.
  • Work hand-in-hand to turn the area of operation visible to economic growth.
  • Work in coordination with NBFCs to develop the financial products as per needs and demand.
  • Develop innovative lending methodology to cater to the needs of the society

Please remember, 
“Lending is easy but recovery is difficult.”
“Recovery problem is just a symptom but disease is bad appraisal.”