What is pool formation type in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: pool formation type

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: Defines the set of characteristics used to form a pool. The values of these characteristics are used to assign retail credits to a pool.

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• Key Concepts: 
  Pool formation type is a feature of the Credit Risk Management component of SAP Financial Services (FS-BA-PM-CR). It is used to define the criteria for forming pools of customers or accounts for credit risk analysis. The criteria can be based on customer characteristics, such as credit rating, industry, or geography, or on account characteristics, such as account balance or payment history. 
  
  How to use it: 
  To use pool formation type, first define the criteria for forming pools. This can be done in the Pool Formation Type Maintenance screen in the Credit Risk Management component. Once the criteria have been defined, the system will automatically create pools based on those criteria. 
  
  Tips & Tricks: 
  When defining pool formation type criteria, it is important to consider how the pools will be used. For example, if the pools are being used for credit risk analysis, then it may be beneficial to create pools that are homogeneous in terms of customer characteristics or account characteristics. 
  
  Related Information: 
  For more information on pool formation type and how to use it in SAP Financial Services (FS-BA-PM-CR), please refer to the SAP Help documentation.