Frequently Asked Questions (FAQs)

CreditEnable is building the world’s first managed marketplace for SME credit. The Company provides decision-optimising solutions to help SME lenders grow efficiently and supports SMEs to prepare for and access affordable credit from formal financial institutions.

CreditEnable delivers tech-driven intelligent lending solutions specifically tailored to the needs of SME lenders and helps enable revenue growth, effective risk management and cost reductions through increased efficiency.

This is offered to lenders via two main services:

1. How we help you grow your loan book: An end-to-end digital origination service, and
2. How we save you cost and time: Credit Assessment as a service, operating on a subscription or PAYG model. Triaging to eliminate borrowers that are not a good match for your institution.

CreditEnable offers both a fully end-to-end origination service and Credit Assessment as a service to deliver better, quicker and more affordable lending and borrowing. We help SME lenders reduce the time taken for an SME lending decision from 4-6-weeks to just days, and at a fraction of the normal cost. In short, CreditEnable makes the SME lender’s life easier through the entire process – from lead generation to disbursal.

CreditEnable firstly markets to and attracts SME borrowers, and performs a series of pre-qualification checks on each SME:

1. KYC, document collection and packaging of the loan request.
2. Automatic modelling to remove borrowers who are not creditworthy.
3. Soft-credit pull via Experian.
4. Lender matching algorithm – as a lender you will receive only potential SME borrowers that match your lending criteria.

Through this process, CreditEnable ensures that you receive high quality SME leads that have been pre-qualified in the loan application process. Using our services, you are likely to accept 99% of cases for credit committee review.

CreditEnable guides borrower SMEs through the loan application process to ensure they have the correct documentation, further reducing the time and cost on your side to take the borrower through to disbursal.

Platform tools:

CreditEnable offers several tools that are easy to integrate into the underwriting process for SME lending.

These are:

1. Origination Tools – Fully Digital Origination.

• • Quickly generate a set of pre-qualified leads that are exactly aligned to your risk profile. Our origination tool allows lenders to access new borrowers/sectors which match their credit requirements at the click of a button. Our Origination tools help SME lenders to grow loan book without increasing operating expenses, and to generate new credit-assessed opportunities by borrower, by location, or by sector.
  • Location based origination tool for when your Relationship Managers wish to target a particular area or location for visiting the credit qualified leads, CreditEnable’s tool can help them real time wherein they can approach the prospective borrower with pre-defined set of assessment indicators. This helps eliminate many intermediaries for sourcing good quality leads and can save costs to lenders as well.

2. Loan Eligibility Assessments.
   • Accurately and reliably calculate the total absorptive capacity of a borrower based on reliable financial forecasts and objective criteria.
   • Achieve a 99% efficiency improvement in the time it takes your credit analysts to complete a capacity to pay assessment on a loan.
   • Reduce mistakes and remove subjective determinations from the assessment process.
3. Risk Management. We understand how difficult it is to stay on top of the sector trends that might impact on your borrower’s ability to repay. Imagine a world where everything you need to manage risk in your SME book is available on a single dashboard and where absolute losses can be reduced by up to 20%.
4. Key Ratio Trend Analysis. Instantly compare key ratio trend analysis graphically.
5. Sector Trends. Understand local, national, regional and global sector trends that can impact on a borrower’s ability to repay debt.
6. Robust Peer Comparisons. Quickly compare the financial strength of a particular borrower against their peers for accurate loan pricing.
7. Portfolio Optimisation. Easily evaluate overall portfolio credit quality in light of changing sector dynamics, receive real-time notifications tailored to your portfolio to let you know when changes in sector credit quality occur so that you can reduce the probability of Non-Performing Loans.

Our SME credit analytics are second to none. For MCA registered companies we have the ability to access millions of financial points. Because of the vast amount of granular financial information we have on SMEs, our credit analytics gives deep insight about companies’ financial strength relative to their peers as well insight into how pressures on margins and growth will impact on individual companies’ ability to absorb and pay back debt.

We develop all our lending solutions in collaboration with SME lenders. This means that the tools and the reports on our platform are specifically designed to meet the needs of lenders and integrate seamlessly into their existing workflows and processes.

The Credit Analytics tool allows lenders to analyse a specific company for a potential loan and to obtain an immediate assessment on its financial eligibility for that specific loan.

The eligibility of the company for a particular loan is determined based on CreditEnable’s proprietary credit algorithm which takes into consideration:

1. The strength of the company’s financials in isolation;
2. The company’s financial strength relative to its peers;
3. Other lead indicators that are critical to credit and risk assessment; and
4. Each lender’s specific and distinct credit requirements.

After we run our proprietary algorithm, we will deliver a customised loan eligibility report that is tailored to each individual lender’s needs.

CreditEnable’s Credit Analytics tool is designed to improve efficiency during the initial stages of credit analysis.

Our algorithm for assessing the credit worthiness of a company is based on traditional cash flow analysis. We start with the company average revenue and core business net income margin over a business cycle and project the growth rates at an average sector rate with a predetermined fade rate over time. The available credit is then calculated based on a user defined DCSR rate.

CreditEnable’s analytics is based on traditional credit analysis methods and internationally recognised portfolio management techniques. Our data is sourced from reputable sources and is quality checked using automated rules developed by qualified accountants and forensic accounting experts. We collaborate with large forensic accounting firms to gather data intelligence and market development.

We also statistically sample the data for further manual checks for consistency and accuracy. Although the nature of SME data is sparse and at times unreliable, our data and IT team are seasoned professionals who have worked in the industry for many years with experience in dealing with data quality related issues.

We have built our credit analytics team with seasoned professionals who have worked as credit and risk analysts and portfolio managers.

CreditEnable assesses companies for credit in much the same way an SME lender does. Our credit model integrates the key factors that lenders normally use when performing a fundamental credit analysis of a prospective borrower.

Our proprietary algorithm works by assessing a particular SME borrower to determine whether the core business it is involved in has sufficient revenue, margin and cash flow to pay back a loan over a specific period at a specific interest rate. We assess the borrower on its own merits, and also in relation to its relevant peer set in its own sector.

Like lenders, we assume that most SMEs over-estimate:

1. Their rate of growth;
2. Their ability to sustain that growth over the medium to long-term; and
3. Their ability to generate profit and to sustain high margins over time.

Like lenders our proprietary credit algorithm also applies an appropriate discount to a company’s growth, profit and margin forecasts.

Like lenders, we also assume that companies that are experiencing outsized growth on average cannot sustain that outsized growth into perpetuity.

Ultimately CreditEnable’s analytics help lenders to grow revenue, increase efficiency, improve the quality of their loans and decrease the time it takes to identify and assess potential SME borrower clients.

CreditEnable analyses the financial data pertaining to a company. We do not cover other elements of credit risk, like Promoter’s risk, Product / Market / Industry risk, Reputation Risk, Competition Risk, Substitution Risk, Regulator Risk, or Concentration Risks.

Like lenders, we do not assume that the annual accounts stating financial performance are the only inputs required to make a sound decision on which company to lend to.

We believe that a borrower’s integrity and willingness to pay are equally important elements of the ultimate decision to lend and that lenders are best equipped to make a determination about these. We therefore do not do due diligence on companies or promoters nor do we provide an assessment of the managements’ integrity or willingness to pay as part of the analytics delivered on the platform.

CreditEnable does not guarantee the accuracy of the financial accounts that are filed by companies with the Ministry of Corporate Affairs.

The key drivers of growth and risk for a company are related to the nature of its business and the competitive environment in which it is operating. Empirically, our analysis of global data has found that companies with the same revenue but operating in different sectors have different growth rates and cost structures, and therefore different margins, cash flow and ability to repay. Consequently, CreditEnable’s analysis compares companies to relevant peers in their own sector rather than to companies with similar revenue profiles in other sectors.

Based on our global analysis of large samples of companies’ financial data we have found that in the long run, say over a period of 5 years, almost all companies will trend towards the average revenue growth rates and operating margins for their sector. This also holds true once the company matures, for instance companies that are 10 years old will have attained steady state and therefore their growth rates and margins will have stabilized and will tend to mirror the sector average.

CreditEnable’s solutions are designed to enable intelligent lending.  We assist in the decision-making process by filtering through very large data sets quickly to provide an efficient first filter on:

1. Whether a potential client can absorb a particular loan (size, tenure, interest rate) a lender wants to give.
2. Quickly identify new borrowers/sectoral opportunities which match a lender’s credit parameters.
3. Reduce the risk by bringing greater line of sight on the relative risk of a particular borrower or sector.

As such our analytics are to facilitate faster, more informed decision making to drive profitable SME lending growth by increasing efficiencies, reducing transaction costs involved in origination and help improve the quality of loans.  Our credit assessment also includes other aspects of past borrowing history, default & delays in existing borrowings, KYC validation and market feedback, amongst others.

Decisions as to whether to make a loan and the amount and terms of the loan are solely at the discretion of the lender. CreditEnable does not make recommendations on those matters.

For MCA companies we have the ability to access millions of financial points. We have developed sophisticated technology that allows us to quickly identify, collect, clean and standardise data so that it can be integrated into our credit analytics.

In addition, through our digital marketing, DSA and offline channels we secure leads lenders would not otherwise have access to and this is proprietary.

1. Imagine a world where everything you need to manage risk in your SME book is available on a single dashboard and where absolute losses can be reduced by up to 20%.
2. Accurately and reliably calculate the total absorptive capacity of a borrower based on reliable financial forecasts and objective criteria.
3. Increase approval rates to 99%.
4. Time to approve a loan reduces from 4-6 weeks to 3-4 days.
5. Reduce mistakes and remove subjective determinations from the assessment process.
6. Achieve a 99% efficiency improvement in the time it takes your credit analysts to complete a capacity to pay assessment on a loan.
7. Quickly generate a set of pre-qualified leads – automatic pre-approved candidates exactly aligned to your risk profile.
8. Increase access to individual borrowers or new sectors which fit specific and distinct credit parameters, without the need to add more staff or branches.
9. Provide a conservative and standardised assessment of credit risk and capacity to repay, which can be integrated into credit decisioning processes as an additional sense check on loan sanction amounts and risk premiums.

Our service is more than a credit tool. It is a stone-bed for efficient credit valuation and credit decision management.

Our algorithm, which may be similar to a lender’s objective algorithm, would nevertheless result in a very different credit portfolio with different return and risk profile. Using a consistent approach to credit valuation allows credit portfolios to be constructed quickly and consistently for many sectors and markets. Using relative risk ranking to benchmark, the credit manager and senior management can quickly and accurately manage credit exposure and efficiently allocate risk capital.

The tool could also be a tool for agents on the ground to assess the loan sizes for potential clients.

CreditEnable gathers and integrates a wide variety of financial and lead indicator data from a myriad of publicly available sources including Registrars of Companies, Stock Exchanges and other relevant data sources in each country where we are active. We also integrate anonymised financial information that lenders we work with give us permission to use.

In India we integrate data from the MCA, other government ministries such as Ministry of Finance, and other publicly available sources that regularly produce data on relevant financial metrics for SMEs.

CreditEnable also is building a set of proprietary SME data basis the thousands of Indian SMEs that contact us each month.

This data feeds into the universe of data we hold on SMEs to further enrich the data and provide more accurate results. Note, this data is anonymised so that the source is not traceable, and our client’s data is kept confidential.

All client data is stored and treated in accordance with data privacy regulations and best practice in India as well as the UK, and the company has policies and procedures in place to ensure the safety and security of data, products and systems.

CreditEnable’s Privacy Policy is located here: https://www.creditenable.in/privacy-policy