The fingerprint - Part 2

Continued..... from Part 1.. ..highlights of a talk on "Fraud Prevention in Farm Equipment Financing"

Observation 3 -  Know your domain

I've read about Luca Pacioli's Quote, which I shall use slightly differently - "He who does business without knowing all about it, sees his money go like flies ".

It was Luca who laid down the earliest fundamentals of accounting, and is considered the "Father of Accounting".

Most of us as financiers are here, because we need to do PSL (Priority Sector Lending) as a mandate. Nay, NBFCs are not excluded in this rat"e" race.

Can we all confidently say that all our internal stakeholders of – Credit, Operations, Sales and Strategic heads all understand the business and its model well ? If your answer was Senrios do understand - Seniors in the company work it out at “Portfolio” Level of how many did we source and how many were we able to convert using certain internal guidelines … Are these Guidelines working in our favour ? Ask 5 questions and you will know your answer on how equipped you are :

If you actually check, you will find yourself coming out with justifications and reasons. If Answers are restricted to STRICT Yes and No, and doubtful are to be considered NO… you will find higher number of NO… This is where knowing the subject helps.

The customer type, why he uses, what records is he likely to have, the relevance of having the equipment in time, how will he repay, how is intention assessed etc., everything needs to be common known and a trained force needs to be there…

What connection does this have to Frauds? This is where cultivation of Frauds starts :  Try talking to a Credit Person about “Migration Cycles” or “HMR” or “ Usage” and you would not be able to strike a logic. So what would anybody logically do – structure, interpret and re-define data to suit the requirements of credit.

An inefficient credit process in the back-end can drive a signal of a loophole announcing “Oppurtunity”. This exists in every point of handsoff in the process of an Agri Loan. Every one in the line must understand the subject sufficiently well enough, not to get taken for a ride.

If you are one of the processors, the caveat of knowing the domain is on you….. !