Approach for Gradation of Risks

All "Borrower/s" on the loan facility are hereby informed that the company has the following approach and considers the following factors for assessing the gradation of risks for each Borrower:

No.	Factors we assess	Description
1	Profile, financial stability, and market reputation	We assess each borrower's financial health and standing by analysing various factors such as employment history, income stability and overall financial management practices.
2	Credit history (vintage on bureau, bureau profile, repayment across trade lines, enquiry trend etc.)	We assess each borrower's credit history in detail, including reviewing their credit bureau report, examining payment history across various credit lines, and counting all credit inquiries to ensure a complete understanding of their credit behavior.
3	Duration of relationship with the Borrower	We assess the length of our relationship with each borrower, as a longer association provides us with greater insights into borrower creditworthiness and repayment habits, which is crucial for a comprehensive financial evaluation.
4	Default risk in related customer segment	We consider the historical default rate among borrowers with similar characteristics to the borrower in question. This provides insights into the overall risk associated with lending to borrowers in a particular segment.
5	Income of the customer	We evaluate the borrower's loan repayment capacity by considering their income level. A borrower in a high-income bracket is viewed as more likely to maintain stability and make timely repayments.
6	Obligation to Income ratio (OTI)	We measure the borrower's total current outstanding debt by comparing their monthly debt obligations to their monthly income. A borrower with minimal debt has greater financial flexibility within their budget to meet loan repayment obligations compared to a borrower burdened with high debt.
7	Geography (location) of the Borrower	We take into account the economic conditions and historical default rates in the borrower's geographic location. Borrowers from regions with strong economic growth and low unemployment rates are typically seen as having a reduced likelihood of default.
8	Regulatory stipulations, if applicable	As part of our assessment, any applicable regulatory stipulations are duly taken into consideration.
9	Any other factors on a case-by-case basis, as applicable.	In addition to the above factors, we also consider other relevant information on a case-by-case basis. This could include the borrower's assets and other factors that may impact their ability to repay the loan.

For comprehensive information, please refer to our interest rate policy here.

Navi Finserv Limited (Formerly Known as Navi Finserv Private Limited)

2nd Floor, Vaishnavi Tech Square, Iballur Village, Begur Hobli, Bengaluru, 560102

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