Inspiration
Being a start-up, we were very often confronted with a problem: It is very difficult to get funding for your ideas. Because the actual banking scoring takes into account only the financial data of the companies. Being a new company, we could not provide any track records in terms of financials. And that is the case of many other. More than 55,000 SMEs need financing for their projects, but most of the loan requests are rejected by the banks. That is why we've decided to develop a special Scoring system for businesses and especially - SMEs, along with our P2P project.
What it does
Our Scoring4Business (S4B) is an online module, 100% automated, which takes into consideration not just the financial data of companies, but also founders profile: their assets, their official income declared at Tax Service, bank statements (through Open Banking), credit history and business experience. This way, we can find out what is the payment capacity and risk of default of the company. Our algorithm offers a credit score for each company which is checked in the system and provided valuable information about which institutions deserve to be financed or not, by a fully automated system.
How we built it
We have a pretty good experience already with our standard Scoring for individuals. It has been developed and adjusted for more than 2 years, working seamlessly now and which helped us reach one of the lowest NPL rates in Moldova - just 2.9%.
Challenges we ran into
It was a real challenge to be able to become an MVP in 3 days. For legal reasons, we cannot provide real data of some companies in the Scoring MVP. Respectively, we had to replace the real data with fake data. It was an adventure, I had the last night sleepless. But it was worth it.
Accomplishments that we're proud of
We are very proud that in 2 years, Fagura has managed to help more than 1000 investors to find the path on how to maximize their profits. Almost 0.5 mln Euro have been invested through our platform with annual profits 10-15%. On another side - more than 650 borrowers have found a credible, fast, reliable, and 100% online. Now we are aiming to bring the same experience for SMEs.
What we learned
I learned that ideas change over time. We started to develop a crowdfunding platform. We still believe in the power of the crowds. But we understood that our great advantage is the technology, which we develop and that it is time to share with other Banks or Non-Bank Lending Organizations. We can work with banks, not just compete. And this approach will allow us to accelerate our mission.
What's next for Scoring4Business
We are an open company. We believe Scoring4Business could be a valuable tool not just for Fagura, but also for banks and other financial institutions which are looking to fund companies with great ideas:
- Online, 2. Fully automated process. That is why Fagura has developed this tool so it could be used as a verification tool or white label by other institutions. This would save time for everybody involved in the process, but most important - money. Today, banks keep uninvested in their accounts over 34 billion lei and have an annual uncollected profit of over 3.7 billion lei. Why not make the change and find a formula where everybody wins :)
The market evaluation, based on TAM, SAM, SOM, shows us beautiful perspectives for the development of Scoring4Business in Moldova and Romania: TAM - Total Available Market - EUR 80 million SAM - Service Available Market - EUR 63 million SOM - Serviceable Obtainable Market - EUR 45 million
SOM in the coming years could look like this:
- EUR 3 million in year 1;
- EUR 5 million in year 2;
- EUR 9 million in year 3;
- EUR 13 million in year 4;
- EUR 15 million in year 5.
Through Scoring, can be verified SMEs and Startups that want a loan. But also other companies that enter into business relations and want to know the payment capacity, for offering spaces for rent, e-commerce, car sales, etc.
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