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SME Lending

Are you winning your fair share of the SME lending market?

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Ensuring SME lending is a win-win for all parties

Even before the impact of the global pandemic, financial institutions and lenders were being asked to help bridge an estimated US$3.4 trillion SME funding gap in unmet trade finance, with demand for financing of small businesses rapidly becoming an acute challenge.

It’s a mind-boggling number largely driven by demand for unfilled or rejected loan, mortgage, and trade finance applications tabled by small businesses and SMEs in emerging markets. The UN in particular was aware of the challenge. Prior to the pandemic, SME lending was estimated to equate to up to 10% of global merchandise trade.

But now that figure is likely to be far higher. As a result, banks and lenders are acutely reliant on access to the very best data, automation, and technology to perform proper credit risk analysis and help bridge the gap for SMEs, sole traders, and small businesses.

Among the most promising routes is transactional analytics for SME lending.

Loan origination rejection rates have always been higher among micro-businesses, and small and medium-sized enterprise borrowers, due to the increased costs of serving customers, high-risk financial profiles, and a lack of traditional data to enable accurate loan assessment. As a result, there’s a potential to over-compensate when it comes to credit risk management.

But with access to the broadest datasets available, investment in the right technology, and application of AI and automation, SME lending can be a win-win for financial institutions and small businesses.

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FICO® Platform is a springboard for greater SME lending and improved financial returns

Banks and lenders across the globe are already opting for FICO® Platform to develop and deploy the powerful, transaction-based, machine learning predictive models to power their SME lending initiatives. The models are also directly helping drive SME originations by reducing the time to yes for new customers.

FICO Platform’s agile, cloud-hosted technology is providing transaction profiling capabilities to enable real-time lending decisions based on sizeable volumes of data. It also continually drives the development of microscoring services, which analyze transaction data from Open Banking APIs to assess new-to-bank customers.

Thanks to well-informed real-time insights, a comprehensive 360-degree view, and FICO know-how, SME lending is now a win-win for lenders and small businesses.

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With more than 60 years’ innovation and pioneering work in predictive analytics, machine learning, and artificial intelligence, FICO Platform provides a complete, end-to-end set of composable capabilities that empower you to uniquely address a vast spectrum of use cases — right across the customer lifecycle.

It’s the unique combination of Data, Insights, Actions, and Outcomes that delivers a differentiated approach to AI decisioning — at speed and at scale. It enables you to achieve a competitive advantage you would typically only experience with a fully custom approach — where your unique know-how and intelligence are kept secret — while lowering your costs and speeding up the time to market.

Case Study

SA Taxi

A South African company that uses cloud-based decisioning to increase growth by 25% and improve decision speed from two hours to 10 minutes
Read more
    Street filled with taxis in Africa

    “Since transitioning to an automated cloud-based system, we are able to grow our business while also making faster and more accurate application decisions.”

    Itumeleng Nomlomo, Senior Credit Analyst
    SA Taxi


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