Let’s begin with what Acme Financial Services (AFS), our fictitious Consumer Finance company, does. Because this will tell us the critical pieces of information AFS deals with, and that in turn will give us the required insights for building its data model.

AFS is in the business of lending to individual customers. The typical portfolio is a mix of Personal Loans (unsecuritized cash loans not backed by any collateral), Auto Loans (loans for purchasing automobiles), Home Loans/Mortgages (loans against property), and small-ticket loans for Consumer Durable products (like TV, refrigerator, home theater, etc.).

For each customer AFS records typical information including name, address, email, age, sex, marital status, education, income, etc. A customer may have multiple loans so this information is kept at the ‘customer level’, meaning, that a change in this information for a customer would automatically appear across all her loans. Every customer is identifiable by a unique Customer ID.

For each loan AFS keeps track of the loan amount (Amount Finance), the cost of the collateral asset (Asset Cost), loan duration (in months), interest rate, installment amount (EMI - equated monthly installment), date the loan was given (Disbursal Date), and the total number of installments. Each loan has a unique LoanID and is provided as a Loan Product (Auto/Mortgage/Personal, etc.).

Depending upon the repaymnt history AFS also calculates the portion of principal that is still to be paid (POS - principal outstanding). Customers whose repayments are overdue are referred to the Collections department that also tracks the portion of principle that was due but has not yet been paid (DelPOS - Delinquent Principal Outstanding), no of intallments overdue (Bucket), and Late Fee to be levied.

Existing customers are targeted by the marketing department through various promos and campaigns. A record is kept of who was targeted when by what promotion. If the customer takes the offerred loan product within 30 days, it is considered to be a direct reposnse to the promotion.

We could also go into details of what it costs AFS to run its business, but lets keep that outside the scope of this project. For the time being we have sufficient overview of AFS’s business.