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SUB CATEGORIES Credit Bureaus  |  Credit Insurance |  General | 

Experian launches credit scorecard for business credit granting

28 August 2012 Experian

Experian, the global information services company, has launched Commercial Delphi, a sophisticated credit score for business credit granting that provides greater granularity to risk ratings.

Early indicators of payment risk are an invaluable asset to any business says Michelle Beetar, managing director of Experian South Africa.

“Incisive commercial credit scoring, long a quest among all information services organisations, is critical in assisting businesses to evaluate debtors effectively. It aims to assist firms to treat SME businesses and non-SME businesses appropriately, with the personal credit worthiness of principals of the business being taken into consideration.”

It is against this background that Experian SA, has developed a statistical scoring model, titled Commercial Delphi designed to predict the likelihood of business failure over a 12-month period.

Commercial Delphi has been developed to operate on multiple data access platforms.

Beetar says a system designed to ensure that its users are able to make quick and confident credit decisions should deliver results regardless of a business’s legal status, size and age.

“It should be structured such that it scores all active businesses, including sole proprietors; it should treat SME and large business appropriately and have the facility of scoring new start-ups and established businesses.”

Beetar says the information used in the scorecards should fall into two broad categories – adverse information and stability indicators. “Credit granting organisations must always look at both areas when analyzing the risk grade.”

Additionally, risk grades need to be updated real time, as and when factors material to the credit worthiness of a business change.

“With certain key elements used in the scoring process feeding into the database as often as daily, business are thereby assured that they have the most up-to-date risk profiles on their debtors.”

Quick Polls

QUESTION

Financial behaviour experts suggest that today’s risk modelling methodologies ignore your client’s emotional ability / behavioural capacity. What are your thoughts on spicing up risk profiling tools to make allowance for your client’s financial behaviours

ANSWER

[a] Bring it on; my client’s make too many irrational financial decisions
[b] Existing risk profiling tools are adequate
[c] Risk profiling tools should be based on the model / rational client
[d] The perfect risk profiling tool is science fiction
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