Tool for assessing credit risk in small and medium sized enterprises

Purpose and goal

The goal was to write a feasibility study, which was to answer the question regarding whether it was practically feasible and financially viable to develop an internal credit risk assessment tool tailored to SMEs. The purpose is to increase the share of SMEs which have access to capital at market based interest rates, through improved credit assessment. The goal has been achieved. A report which answers these questions in a satisfactory manner has been written. It is both practically feasible and financially viable to develop an internal credit risk model.

Expected results and effects

The result is that Toborrow now has plan for how to develop it´s own internal model of credit risk. The plan includes an analysis of financial consequences of building an internal credit risk model and what resources are needed in terms of internal and external skills.

Planned approach and implementation

The project was realised by a consultant together with internal staff. The objective was to answer the questions which had been posed in the application. This was achieved by the consultant being present at Toborrow during two months. During this time interviews with experts were performed. Relevant research was also compiled and evaluated. The consultant also drew on his own and his employers expertise in project planning and IT systems for businesses.