Why has the average loan approval time for Julo's business loans increased from 2 days to 5 days over the past quarter?

Introduction

The increase in Julo's business loan approval time from 2 to 5 days over the past quarter is a critical issue that demands immediate attention. This slowdown not only impacts customer satisfaction but also affects the company's operational efficiency and competitive edge in the fintech market. To address this problem, I'll employ a systematic approach to identify the root cause, validate our findings, and develop both short-term fixes and long-term solutions.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a seasonal factor. Has there been any significant change in loan application volume compared to the same quarter last year?

Why it matters: Seasonal spikes could strain our approval process. Expected answer: Application volume is consistent with last year. Impact on approach: If volume isn't the issue, we'll focus on internal processes.

• Considering potential system changes, have we recently updated our credit scoring model or risk assessment algorithms?

Why it matters: New models might be more stringent or require additional processing time. Expected answer: A minor update was implemented last month. Impact on approach: We'd need to investigate the impact of this update on approval times.

• Thinking about staffing, has there been any significant change in our loan approval team's composition or size?

Why it matters: Staff changes could affect processing capacity and efficiency. Expected answer: The team size has remained stable. Impact on approach: We'd shift focus to process efficiency rather than staffing issues.

• Regarding data integrity, are we confident that the loan approval time metric is being calculated consistently across all systems?

Why it matters: Inconsistent measurement could lead to false conclusions. Expected answer: The metric calculation hasn't changed. Impact on approach: We'd focus on actual process changes rather than measurement issues.