Risk and Credit Assessment

Raqamyah is a Crowdlending platform, connecting verified and pre-qualified financee (debtor's) with both Individual Financers and Institutional Financers. The platform applies the innovative technology of crowdfunding to eliminate the cost and complexity of conventional finance whilst offering financee (debtor's) fast access to low cost finance.

Raqamyah places large emphasis on listing pre-qualified SMEs on the platform. To be considered for finance, the financee (debtor) must meet certain criteria such as length of business, sector, revenue threshold, and level of debt. Each funding proposal undergoes an extensive internal credit and risk assessment that is supported by robust external verification as follows:



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



The credit score

The scoring model determines if an applicant is within Raqamyah’s acceptable risk band or not. If the applicant is not fundable, the funding request will be rejected, and it will not be presented to the financers. If a funding request is within acceptable risk band for Raqamyah, our scoring model will show what the credit score will be. The credit score ranges from 0 to 10 points. To make the score more easily readable, we convert this score to the categories you know: A+ to C. The profit rate is determined by the number of points attained and the duration of finance request. That is why profit rates within a credit score category can differ sometimes:

Grade Rating Definition
A+ Asset quality: Strong
Working capital management: Strong
Repayment capacity: Strong
Management: Very good
Size and position in the industry: Very satisfactory
A Asset quality: Fairly strong
Working capital management: Fairly strong
Repayment capacity: Fairly strong
Management: Very Good
Size and position in the industry: Satisfactory
BAsset quality: Satisfactory
Working capital management: Satisfactory
Repayment capacity: Satisfactory
Management: Good
Size and position in the industry: Small
CAsset quality: Moderate
Working capital management: Moderate
Repayment capacity: Moderate
Management: Fairly Good
Size and position in the industry: Small