SME’s do not want to be in the overdue portfolio situation, and neither do financial institutions want to deal with it through their clients. Fortunately, as a lender, you may prevent these issues by using the credit analysis tool.
This issue is the third most common cause of the demise of small and medium-sized Mexican businesses, according to statistics from Forbes. The fact that 57% of national enterprises are in this situation is the most complicated aspect.
The financial institutions are now concerned about this since they require better tools and more precise analysis in the credit-granting process in order to avoid losing their resources to their clients.
What exactly is a past-due portfolio and how can it impact businesses?
This issue stems from SMEs amassing a collection of debts and being unable to pay them off before the due date. The portfolio is deemed to have expired if 90 days have gone since that due date and no payment has been made.
As a result of this being a sign that the debtor company is losing money, its operations become unstable. This issue is especially problematic for you if you are the financial institution lending the money because your plans for the resources you should have at that point are out of sync.
How can credit analysis mitigate this situation?
You may considerably lower the danger of dealing with this issue by getting a thorough credit report created with a cutting-edge API, for the following reasons:
– Helps you identify delinquent customers, with indicators such as the Z Score, debt service ratio, general liquidity ratio, average days past due and acid test.
– It is useful to know the credit behavior of your applicants, according to previous financing.
– It lets you know if your applicants have a lot of active debt or too many financing requests in a short period of time, which indicates the state of their financial health.
– You can see their payables and receivables, so you know if they’re a lot on a regular basis.
– It tells you both the client risk and the supplier risk that your applicant has, that is, if they are totally dependent on a very small number of clients and suppliers, or if their diversification is balanced.
– If you have a complete API, you can obtain a score that shows you, according to a numerical qualification, the credit risk that an applicant represents and, therefore, the probability of generating a past-due portfolio.
A thorough credit risk analysis can help you make better decisions during the credit-granting process and lower your risk of dealing with non-performing portfolio issues by giving you access to all this information.
Financing precisely with CRiskCo
It is typical for lenders to worry about protecting their business and trying to avoid any issues. With its API interface, which CRiskCo developed to help the financing processes, you can conduct the most accurate analysis possible to get to know your applicants.
You may improve your decision-making and stay away from overdue portfolios with the help of its analysis with artificial intelligence and speedy development of credit reports.
Introduction: “Constancia de Situación Fiscal” (FISCAL) document, is generated during the initial registration of any company with SAT. Updates of this document are made exclusively when any of its values undergo a change. FISCAL offers…
- Aug 26
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