What the workflow covers
A credit approval workflow takes a proposal from sourcing to sanction: data capture, documents, eligibility and policy checks, appraisal, approval at the right level, sanction terms, and the handover to documentation and disbursement.
The heart of it is delegated authority. Who can approve which loans, up to what amount, for which products and risk grades, and what happens when a proposal sits outside policy.
Designing the approval matrix
- By amount. Credit manager up to one limit, central credit above that, credit committee beyond.
- By risk. A weaker rating or higher LTV moves the proposal one level up, whatever the amount.
- By product. Secured and unsecured, retail and wholesale usually need different matrices.
- Deviations. Anything outside policy needs a named approver with deviation authority and a written reason.
- Committee. Quorum, voting and minutes for anything above individual limits.
- Maker-checker throughout. The person who appraised it never approves it.
Why email can’t hold the line
When approvals travel by email, the matrix is only as strong as everyone’s memory on a busy day. A proposal lands with the wrong approver. A deviation gets waved through by someone without deviation authority. The terms in the approval mail drift from the terms in the sanction letter.
You also lose the numbers a credit head actually wants. Turnaround time by stage, pending approvals by level, deviation rates, approver-wise decisions. Email simply can’t give you those, and they are exactly what auditors ask for too.
What changes when the workflow is governed
- Proposals route themselves by amount, product and risk to the right approver or committee.
- Self-approval is blocked and deviation authority is enforced.
- Sanction terms are locked to the approved version. Changes go back for approval.
- SLAs and escalations stop proposals from stalling.
- Dashboards show TAT, pipeline, deviations and approver decisions.
- A tamper-evident audit trail is ready for internal audit, statutory audit and RBI inspection.
Do you really need a full LOS?
If you are doing high volumes of standard retail loans, a packaged LOS makes sense. But a lot of NBFCs, especially in MSME, structured, wholesale or new product lines, find that packaged systems don’t match how their credit team works, and a custom build takes quarters.
A governed no-code platform sits in between. Your credit team sets up its own application forms, approval matrix, committee rules and dashboards, goes live in weeks, and adjusts when the policy changes. Averoic is used this way in production at a SEBI-registered alternative investment manager, with up to 60% faster time-to-market for new lending processes.
Works with alternative lenders, AIFs, NBFCs and insurers in India on approvals, maker-checker controls and audit readiness.
See how your own process would run on Averoic — configured, not coded, with maker-checker controls and a tamper-evident audit trail built in.
Frequently asked questions
What is a credit approval workflow in an NBFC?
It is the process that takes a loan proposal from data capture and appraisal through approval by the right authority (an individual or the credit committee) to sanction, enforcing the NBFC’s delegation of authority, deviations policy and maker-checker controls.
How do NBFCs enforce delegation of authority?
By routing each proposal automatically, based on amount, product and risk grade, to an approver with enough authority, blocking self-approval, requiring deviation authority for exceptions, and recording every decision in an audit trail.
Can an NBFC automate credit approvals without a loan origination system?
Yes. A no-code governed workflow platform such as Averoic can run intake, appraisal, the approval matrix, credit committee voting and dashboards with a tamper-evident audit trail, alongside existing core and accounting systems.