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by Rakesh Waghela

9.3 KPIs and failure modes by function

Sales / channels

Section titled “Sales / channels”

KPIs

Section titled “KPIs”
  • Applications per week (by channel).
  • Conversion rate at each funnel stage.
  • Cost per disbursal (CAC).
  • Repeat rate (% of borrowers who take a second loan).
  • Channel-level NPA (origination quality).
  • DSA / CA / partner activation rate.

Failure modes

Section titled “Failure modes”
  • Pushing volume regardless of quality (chase commissions).
  • Misrepresenting offers to borrowers.
  • DSA fraud — colluding with borrowers.

Credit

Section titled “Credit”

KPIs

Section titled “KPIs”
  • Approval rate (by grade, channel, product).
  • Time-to-decision (target < 24h for automated; < 5 days for manual).
  • Decline reasons distribution.
  • Deviation rate.
  • Post-disbursal performance vs underwriting grade.
  • First-loan-default rate (60 / 90 DPD within first 6 months).

Failure modes

Section titled “Failure modes”
  • Policy drift toward looser standards under volume pressure.
  • Deviation rate climbing without justification.
  • Analyst productivity gaming (rubber-stamp approvals).

Risk

Section titled “Risk”

KPIs

Section titled “KPIs”
  • Bucket-level book composition (Standard / SMA / NPA).
  • Vintage curves by cohort.
  • ECL vs realised loss.
  • Concentration vs caps.
  • Early-warning-signal triage SLA.
  • Model performance (PSI, Gini).

Failure modes

Section titled “Failure modes”
  • Late EWS triage → preventable NPAs.
  • Ignoring concentration creep.
  • Stale models / policies.

Operations

Section titled “Operations”

KPIs

Section titled “KPIs”
  • Application-to-disbursement TAT (target < 7 days).
  • KYC completion rate (first-attempt).
  • Disbursement success rate.
  • NACH activation rate.
  • Reconciliation exception rate.

Failure modes

Section titled “Failure modes”
  • Vendor outages compounding into operational backlog.
  • Manual reconciliation overload.
  • Document deficiency loops (borrower nudges fail).

Collections

Section titled “Collections”

KPIs

Section titled “KPIs”
  • Collection efficiency (% collected vs scheduled, per bucket).
  • Bucket roll rate (SMA-0 → SMA-1, SMA-1 → SMA-2, SMA-2 → NPA).
  • PTP honour rate.
  • Recovery rate per NPA cohort.
  • Agent productivity (cases per agent, resolution per agent).
  • Compliance breach incidents (target zero).

Failure modes

Section titled “Failure modes”
  • Aggressive recovery → FPC breach → RBI action.
  • Agent attrition → continuity issues.
  • Settlement creep — too many concessions.

Engineering

Section titled “Engineering”

KPIs

Section titled “KPIs”
  • Production incident rate.
  • Mean time to detect / resolve.
  • Test coverage (target > 70% for critical modules).
  • Deployment frequency.
  • Vendor API success rate.

Failure modes

Section titled “Failure modes”
  • Outages during sanction / disbursement windows.
  • Vendor failover not working.
  • Security incidents.

Finance

Section titled “Finance”

KPIs

Section titled “KPIs”
  • Month-end close TAT (< 5 days target).
  • Reconciliation completeness.
  • GST / TDS filing on time.
  • DSA / vendor payout on time.

Failure modes

Section titled “Failure modes”
  • Late statutory filings → penalties.
  • Reconciliation gaps → audit findings.

Compliance

Section titled “Compliance”

KPIs

Section titled “KPIs”
  • Returns submitted on time (RBI, CIC, CKYC).
  • Grievance resolution SLA met.
  • Internal audit findings — open vs closed.
  • Repeat findings.

Failure modes

Section titled “Failure modes”
  • Late returns → RBI action.
  • Grievance backlog → ombudsman escalations.

InfoSec

Section titled “InfoSec”

KPIs

Section titled “KPIs”
  • Vulnerability remediation SLA (per severity).
  • Access review on time.
  • Incident reporting SLA (target < 6 hours to RBI per IT MD).
  • DR drill success.
  • Phishing simulation results.

Failure modes

Section titled “Failure modes”
  • Material cyber incident.
  • Audit findings unresolved.
  • Vendor breach exposing data.

Cross-functional

Section titled “Cross-functional”

KPIs

Section titled “KPIs”
  • NPS / customer satisfaction.
  • Borrower repeat rate.
  • Net revenue per loan (cross-functional view).
  • Cost-income ratio.
  • Capital adequacy (CRAR).

Failure modes

Section titled “Failure modes”
  • Goal misalignment between sales (volume), credit (quality), and risk (concentration).
  • Slow board governance.
  • Capital raise delays.