Risk and Credit Assessment

SMEs submit complete finance request applications

The process starts with the applicant, who completes the application and uploads all required information on our website. This step provides insight about the applicant and gathers some external background data. It allows Raqamyah to decide if the applicant is eligible for financing in principle based on credit bureau report, turnover, profitability and years in existence and give a preliminary indication of the finance request within three business days.

Raqamyah performs thorough risk assessment of applicant

If the applicant gets through the eligibility test, Raqamyah will further investigate the applicant by visiting him/her at his/her premises. We always interview the applicant to ask any credit questions. The interview serves another purpose as well: we do an assessment of the management qualities and relevant experience of the management. 10% of the credit score is based on the management qualities of the applicant and its team. Once the visit is completed, the scoring is done based on financial (quantitative) and non-financial (qualitative) information. This adds up to several financial indicators, such as operating efficiency, profitability, cash flow, liquidity, leverage, etc., that go back three years in time and the current year. This way, the scoring model shows the development of these financial indicators and gives insight in the financial performance. The financial performance of the applicant makes up for 50% of the credit score.

Furthermore, we review the market outlook of the applicant and distinguish if the market is growing, stable or shrinking. Obviously, when the market outlook is negative, it also has a negative effect on the score. We also review what the position of the applicant is in the market and look at its market share. 40% of the credit score is dependent on the market and the applicant position in the market.

The purpose of the above exercise is to assess each funding request based on the applicant ability and willingness to repay. Data points are analysed, verified and finally scored with an overall risk weighting. This scoring model is then combined with other information from our database such as SIMAH and Bayan Credit Bureau. Together with the non-financial elements, the team and the market outlook, it makes up the credit score

Credit Rating

The credit scoring model determines whether a borrower falls within Raqamyah's acceptable risk range or not. If the borrower is deemed high risk, the funding request will be rejected and not presented to investors. If the funding request falls within Raqamyah's acceptable risk range, the platform's rating model will assign a credit rating to the request ranging from 0 to 10 points. To make the rating more readable, we have converted these scores into familiar ratings: A+ to C, where the profit rate is determined by the number of points earned and the financing duration. This is why profit rates may sometimes differ within the same credit rating band.