New credit risk platform aims to boost SME lending

Wiserfunding enables traditional and alternative lenders to better allocate funds to SMEs, helping them to sustainably build their assets while reducing default rates.

Wiserfunding says that by accessing more comprehensive data to show which companies will likely generate long term value, lenders can achieve their mandate of lending funds to UK small businesses whilst not over-leveraging themselves.

Building on the Z-Score credit risk model, Wiserfunding uses Artificial Intelligence to assess intangible factors such as corporate governance, management capacity and macroeconomic outlook.The platform provides a 12 month probability of default and uses a proprietary Bond Rating Equivalent method to ensure that risk assessments are comparable across industries and markets.

Wiserfunding is co-founded by Edward Altman, professor of finance at New York University’s Stern School of Business and founder of the Z-Score model, and Gabriele Sabato, former head of risk appetite portfolio decisioning at RBS.

Gabriele Sabato commented: “With Brexit preventing many traditional lenders from making investment decisions, and the Banking Competition Remedies fund releasing £775m to increase competition in SME lending, the UK urgently needs a method for more efficiently allocating funding to growing businesses.

"Improved credit risk analysis enables quicker and more accurate funding decisions, ensuring that funding goes to the right UK SMEs. This will reduce the risk of defaults, ensure sustainable earnings for lenders and ultimately, make the UK economy more efficient.”