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Building a great bank or finance company is about getting credit right. There’s no shortage in any country of people or firms wanting to borrow money. The question is always going to be whom to lend to, when, what amounts, with what collateral, at what price…and then what is going to be your credit and asset quality monitoring framework.

Cedar has proprietary credit frameworks for retail, SME and corporates. Most retail credit has become algorithmic in nature. Still getting the input variables right is key and testing the models on a regression model to make sure they output the right credit decisions. Especially for the unsecured products.

SME credit has become the big challenge, but in our view, is an opportunity. Everybody knows that documentation and certified financial statements are hard to come by. Well, that’s also true for the venture capital firms that provide equity capital to SMEs. So how do they assess risk? A VC Managing Partner will tell you 50% of the weightage is on the quality and integrity of the entrepreneur. So, shouldn’t SME credit models of banks take some of this thinking into consideration?

Many parts of the world today are facing credit and NPA challenges. Talk to Cedar to understand better how our approach to credit can help your business enable credit to the next level.

Standard Chartered
Deutsche Bank
Emirates NBD
Dubai Islamic Bank
BNP Paribas
RBL Bank
Royal Bank of Scotland

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