New credit assessment launches to improve SME lending

Professor Edward Altman, founder of the credit risk model Z-Score (pictured above), has launched Wiserfunding to assess the creditworthiness of SMEs.

The new credit assessment helps traditional and alternative lenders to better allocate funds to SMEs, allowing businesses to build their assets and reduce the cost of acquiring new customers.

Wiserfunding uses AI to assess intangible factors — such as corporate governance, management capacity and macroeconomic outlook — and enables lenders to achieve their mandate of lending funds to UK SMEs while not over-leveraging themselves.

The platform provides a 12-month probability of default and uses a proprietary bond rating equivalent method to ensure that risk assessments are comparable across industries and markets.

“With Brexit preventing many traditional lenders from making investment decisions, and the Banking Competition Remedies fund releasing £775m to increase competition in SME lending, the UK urgently needs a method for more efficiently allocating funding to growing businesses,” said Gabriele Sabato, co-founder and CEO at Wiserfunding.

“Improved credit risk analysis enables quicker and more accurate funding decisions, ensuring that funding goes to the right UK SMEs.

“This will reduce the risk of defaults, ensure sustainable earnings for lenders and, ultimately, make the UK economy more efficient.”

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