Lending dictionary
The Lending Glossary
Every term you’ll meet running a lending business, defined in clear, simple language — with the context that matters for MFIs, SACCOs, and money lenders.
100 terms
A
Accrued interestAffordability assessmentAging BucketsAgricultural loanAllocation WaterfallAML (anti-money laundering)AmortizationAnnual percentage rateApproval workflowArrearsAsset financeAverage loan sizeB
Balloon paymentBridge loanBullet repaymentC
Character-based lendingClient retention rateCo-borrowerCollateralCollateral registerCollection efficiency / collection rateCollectionsCredit life insuranceCredit reference bureauCredit scoringCreditworthinessD
Debt-to-income ratioDefaultDelinquencyDigital / mobile loanDisbursementE
Effective interest rateExpected credit loss (ECL) / IFRS 9F
Financial inclusionFinancial self-sufficiency (FSS)Flat interest rateG
Grameen modelGross loan portfolioGroup lending / solidarity lendingGuarantorI
InterestInterest rate cap / usuryInterest suspensionInvoice financing / factoring J
Joint liabilityK
KYC (Know Your Customer)L
Lien / ChargeLine of credit / revolving creditLoan appraisalLoan cycle / progressive lendingLoan Lifecycle ManagementLoan Loss ProvisioningLoan loss reserve / allowanceLoan management systemLoan officer / credit officerLoan origination Loan servicingLoan-to-value (LTV)M
Maturity dateMicrofinanceMicroloanN
Non-performing loan (NPL)O
Operational self-sufficiency (OSS)Origination / processing feeOverdraftOverpaymentP
Portfolio at risk (PAR)Prepayment / early settlementPrepayment penaltyPrincipalPromissory notePrudential guidelinesR
RealisationRecoveryReducing balance interestRefinancingRepayment rateRepayment scheduleRepossessionRestructuring / reschedulingRoll-overROSCAS
SACCOSalary advance / payday loanSavings as collateralSecured loanService feeShare capital / member sharesSocial collateralT
Term loanThe 5 Cs of creditTop-up loanU
UnderwritingUnsecured loanV
Village bankingVintage analysisW
Working capital loanWrite-offWrite-off ratioY
Yield on portfolio