One area the Accion advisory team supported Accion MfB with was developing systems to gather and monitor up-to-date information on the bank’s credit risk. This helped Accion MfB management make better-informed decisions. At the same time, it simplified the process of approving and disbursing loans, giving borrowers faster access to funds and making the bank more competitive.
Accion advisors worked with the Accion MfB staff, building their capacity to produce portfolio risk management reports. They developed an automated process that extracts data from the core banking and loan management systems and imports it into templates that require no specialized software.
During another engagement, Accion’s advisory team and Accion MfB built credit scoring algorithms. They configured tools using behavioral data, like a client’s payment history, and sociodemographic data, like gender, age, and income to more accurately and efficiently assess applicants’ creditworthiness.
Six months after implementing the scores, Accion MfB had cut its portfolio at risk — the percentage of its loan portfolio in arrears — nearly in half. It also more than doubled the number of renewed loans per loan officer. The simplified loan evaluation processes also allowed Accion MfB to reduce training expenses.
Over the years, the two organizations have also collaborated on designing separate scoring systems for new and existing clients and developing a business ranking tool that segmented clients based on their industry and financial health. With all these new risk management tools in hand, Accion MfB now has faster, simpler, more streamlined credit evaluation, loan approval, and collections processes.