Dr. Mohammed Razzak, Executive Director: Analytics, from TransUnion Analytic and Decision Services (ADS) in South Africa
Working in collaboration with one of South Africa’s leading banks, TransUnion developed the Small Medium Enterprise (SME) scorecard for the institution. The solution accurately predicts credit behaviour of South African Small to Medium Enterprises. The SME scorecard determines the likelihood of a small to medium company becoming three or more months delinquent on a line of credit within 12 months of applying for new credit - be it a credit card, overdraft protection, vehicle finance or any other type of loan.
The SME customised scorecard developed for the bank utilises general information on a company, the company’s payment history as well as general, enquiry and public derogatory information on its principles. The scorecard was developed on a population of more than 600,000 scoreable companies.
The SME scorecard significantly outperformed all other available models in the market and the customisation for the bank was completed in a record time. TransUnion will continue to work on future enhancements to the model, which will include the use of additional detailed Credit Providers Association data
Dr. Mohammed Razzak, Executive Director: Analytics, from TransUnion Analytic and Decision Services (ADS) in South Africa adds: “It is vitally important for lending institutions that service small to medium enterprises to have analytic insights as to the credit health and vitality of the businesses they serve. Our valued partnership with this major role player has lead to a robust and prognostic solution that will help it mitigate risk in the commercial environment.
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