What benefit does a credit memo provide to the approval committee?

A credit memo provides detailed insight through narrative additions, which is crucial for the approval committee when evaluating a loan application. It allows the committee to understand the context of the credit request beyond just the numerical data. This narrative can include information about the borrower's financial situation, any relevant changes since the last review, and specific circumstances that justify approval or highlight risks. Such qualitative insights complement quantitative data, enabling the committee to make more informed decisions, assess risk more comprehensively, and understand the rationale behind a loan request. This enhanced visibility fosters better communication and clarity around the creditworthiness of the borrower, ultimately leading to more effective decision-making.