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  • Risk Credit Scores Qredits

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    Desara_GJoka123
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    The document discusses risk scoring models for microfinance organizations making loans to entrepreneurs. It outlines factors that influence credit risk like the business's financials, collateral, activities and market conditions as well as the entrepreneur's experience, finances, guarantees and debt history. The document then discusses Qredits' risk model, which weights the business 70% and entrepreneur 30%, and their process of visiting all customers due to information asymmetry. It proposes connecting to external data sources and financial account information to help pre-select potentially successful entrepreneurs more cost-efficiently and update the risk model.

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    Risk credit scores Qredits

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    Risk credit scores Qredits

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    The document discusses risk scoring models for microfinance organizations making loans to entrepreneurs. It outlines factors that influence credit risk like the business's financials, collateral, activities and market conditions as well as the entrepreneur's experience, finances, guarantees and debt history. The document then discusses Qredits' risk model, which weights the business 70% and entrepreneur 30%, and their process of visiting all customers due to information asymmetry. It proposes connecting to external data sources and financial account information to help pre-select potentially successful entrepreneurs more cost-efficiently and update the risk model.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    12 views17 pages

    Risk Credit Scores Qredits

    Uploaded by

    Desara_GJoka123
    The document discusses risk scoring models for microfinance organizations making loans to entrepreneurs. It outlines factors that influence credit risk like the business's financials, collateral, activities and market conditions as well as the entrepreneur's experience, finances, guarantees and debt history. The document then discusses Qredits' risk model, which weights the business 70% and entrepreneur 30%, and their process of visiting all customers due to information asymmetry. It proposes connecting to external data sources and financial account information to help pre-select potentially successful entrepreneurs more cost-efficiently and update the risk model.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 17

    Risk Credit Scores

    EMN Exchange Visit


    26-02-2015
    Vincent Stulen & Davide Forcella
    Risk management in MF-organizations
    Factors that influence credit risk
    Credit-scoring: pros and cons
    EMN Idea-lab

    Qredits risk-model
    Risk scoring micro-entrepreneurs
    Agenda Internal and external data sources
    From scoring to rating

    What is done in MF Europe?


    What has been done so far?
    Idea-lab survey
    Discussion
    Risk scoring

    The Business
    • Financials
    • Collateral

    • Business activities
    • Market conditions • Expected Loss (EL)
    • Probability of Default (PD)
    • Loss Given Default (LGD)
    • Exposure At Default (EAD)
    Risk scoring MF entrepreneurs

    The Business The entrepreneur


    • Financials • Experience / competencies
    • Collateral • Personal finances
    • Business activities • Financial guarantees
    • Market conditions • Debt history
    Risk scoring MF entrepreneurs

    The Business The entrepreneur


    • Financials • Experience / competencies
    • Collateral • Personal finances
    • Business activities • Financial guarantees
    • Market conditions • Debt history

    Qredits: 70% Starters


    Information Asymmetry

    Critical information for a risk assessment is only


    known by the entrepreneur

    Qredits’ approach: Visit all customers

    (Cost-)Efficiency-problem: How to pre-select


    potentially successful entrepreneurs?
    Connecting to external data-sources in MicroNET
    2014: Collection of external data

    2015: Update risk-model with new


    Qredits riskmodel data sources

    2015: Add new sources?


    - Information from business
    bankaccounts?
    - Information directly from
    accounting software?
    Age of the entrepreneur

    Predictive analytics
    Marital status

    Predictive analytics
    Basic data
    (gender / age / maritial status / address /
    age of the company)
    Add ‘hard’ data
    Financials / guarantees / market conditions
    Add ‘soft data’
    Personal interpretation of the entrepreneur,
    skills, competencies, ambition etc.
    Add external sources
    (Debt history / payments scores / fraud
    checks / bankruptcy score)

    Information from business bankaccounts?


    From scoring to rating

    - Univariate and multivariate analysis

    - Segmentation
    (e.g. starter vs existing / age of the
    company)

    - Purpose based scorecards


    (e.g. initial risk assessment /
    monitoring risks / provisioning
    policy)
    Questions?
    For more information visit:
    www.qredits.com

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