Defining Risk Levels
  • 11 Nov 2021
  • 1 Minute To Read
  • Dark
    Light
  • PDF

Defining Risk Levels

  • Dark
    Light
  • PDF

Risk Levels are user defined categories composed by an interval for number of days in arrears and a correspondent provision amount. Risk levels will be used to calculate the organization's portfolio at risk (PAR), based on the number of loans in arrears that fall into each level.

Based on the Central Bank's legislation in your country, you can define risk levels and the correspondent percentage of provision for each. Mambu will then automatically calculate the provision given your current PAR and you can have access to this information at any time from your Risk Report.

Please Note
Risk levels in Mambu cover both loans and deposit accounts with overdraft enabled.

Please Note
This element can also be configured using Configuration as Code (CasC). For more information, see Configuration as Code.

Adding risk levels

To create a new risk level:

  1. On the main menu, go to Administration > Financial Setup > Risk Levels.
  2. Select Add Risk Level.
  3. Enter the name, days and percentage of provision.
  4. Select Save Changes.

Administration - Financial Setup - Risk Levels view


Provisioning for healthy loans

If you also need to consider the healthy loans for the provisioning calculation, you can do it by adding a new risk level from 0 to 0 days.

This will ensure that all accounts which are not in arrears will also be included in the Risk Analysis reports and in the Aging Analysis risk levels. The Aging Analysis is a type of report in Mambu that allows users to see their PAR and the provision amount based on the risk levels defined previously.

Store Risk level screen with Name, From, To (days) and Provision (percentage)


Was This Article Helpful?

What's Next