SME Credit Risk Models

Historically, credit risk assessment tools have focused on large corporates and consumers. Wiserfunding provides accurate credit assessments for SMEs. Segmented by size, country and industry sector, our models, have been developed on companies with less than 300 employees and £150m revenue.

Innovative Data Sourcing

We combine past financial history with a range of publicly available structured and unstructured data. We source all the inputs we need through our automated API, drastically reducing the time that our customers need to assess the quality of SMEs.

Artificial Intelligence

Using Artificial Intelligence, we take unstructured big data inputs, transform them into structured variables and feed them into our models. Qualitative information, positive and negative press coverage, social media. This data helps us to significantly improve the prediction accuracy of our models.

Module 1

Financial Variables

From over 40 different financial ratios, we derive the most relevant and important depending on the industry and the geography of the SME.

Module 2

Corporate Governance & Qualitative Variables

Our research has shown the significant value of non-financial data in assessing SME creditworthiness. Using big data and social media, we can assess valuable qualitative information about the company or the directors. We use Artificial Intelligence to analyse and transform this unstructured data into powerful inputs for our models.

Module 3

Macroeconomic Variables

The stability and predictive power of our models comes from industry specific macroeconomic variables such as default rates, GDP growth, bank rates, unemployment rates and inflation rates. Looking at the last 6 months trends predicting the next 3 to provide the forward-looking capability to the models.

The Risk Assessment Report

Through our online platform we generate a comprehensive risk assessment report that includes the previous 5 year trend for the most important risk metrics (i.e. SME Z-Score, 1-year probability of default, loss given default and bond rating equivalent), a benchmark with the risk profile of companies operating in the same region and industry and all the financial ratios and corporate governance variables used to prepare the risk assessment.

Want to know more? Access our extensive research below

As a team of leading experts in the field of credit risk analysis and debt financing we have published multiple papers, articles and studies on the subject.

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